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No agreement in Greek debt talks


Greek civil engineers protest outside the Labour Ministry building in central Athens (AP)

Greek civil engineers protest outside the Labour Ministry building in central Athens (AP)

Greek civil engineers protest outside the Labour Ministry building in central Athens (AP)

Crisis talks in Greece for huge new debt deals will continue on Monday, leaders of parties supporting the country's coalition government have said .

Coalition backers held a five-hour meeting late on Sunday with prime minister Lucas Papademos to hammer out a deal with debt inspectors representing eurozone countries and the International Monetary Fund - but again failed to reach an agreement.

Greece is racing to finalise austerity reforms needed for a new 130 billion euro (£108 billion) without which it would face bankruptcy in late March. But in a country deep in recession, with unemployment at 19%, many politicians and unions oppose more austerity measures.

An announcement from Mr Papademos's office said the three had agreed on measures to cut spending in 2012 by 1.5% of gross domestic product - about 3.3 billion euro (£2.7 billion) - improve competitiveness by cutting wages and non-wage costs, such as social security contributions, reduce auxiliary pensions and recapitalise banks without nationalising them.

But the three leaders - socialist George Papandreou, Antonis Samaras of conservative New Democracy and Giorgos Karatzaferis of the rightist Popular Orthodox Rally - differed as to what this would mean in detailed proposals.

Mr Samaras said upon leaving the talks that Greece's creditors "are asking for more recession which the country cannot bear. I am fighting, with all my means, to prevent this". Mr Papandreou objects to cutting actual wages and wants the state to take over banks, at least temporarily. His socialist party executive is meeting at the moment to consider these proposals.

Political party leaders are obliged to provide a first response to the proposals by Monday morning, socialist party spokesman Panos Beglitis told reporters after the party leaders' meeting with Mr Papademos.

Mr Papademos is due to resume talks with representatives of the "troika" of Greece's creditors - the European Union, the European Central Bank and the International Monetary Fund - later and will be joined by finance minister Evangelos Venizelos and labour minister Giorgos Koutroumanis.

Unions and employers' associations have warned that private sector wage cuts would deepen the nation's recession, now in its fourth year.

Mr Papademos and Mr Venizelos also met separately with representatives of banks in an effort to complete a bond swap deal that would reduce Greece's debt by 100 billion euro (£83 billion). The talks involved Charles Dallara, managing director of Washington-based Institute of International Finance (IIF), and Jean Lemierre, senior adviser to the chairman of French bank BNP Paribas. Josef Ackermann, the CEO of Germany's Deutsche Bank and the IIF's board chairman, is also in Athens.