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Greece Agrees on Sharp Cuts to Clear Way for Bailout

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Disagreement over pension cuts had stalled an agreement among Greek leaders on austerity reforms demanded by the troika of the European Union (EU), International Monetary Fund (IMF) and European Central Bank (ECB). With several missed deadlines for that agreement behind him, Greek Finance Minister Evangelos Venizelos set off for Brussels on Thursday without it. However, a phone call after his arrival signaled an end to the standoff.

Bloomberg reported that, before the deal was struck, EU spokesman Amadeu Altafaj said he could not confirm reports of an additional 15 days granted to Athens to resolve its differences. “No one seems to be aware of such an extension,” he was quoted saying in advance of an emergency meeting of EU finance ministers. Six days of talks had resulted in a narrowing of differences, but no resolution.

A statement from Prime Minister Lucas Papademos’s office said that he and the leaders of the three political parties that support the government “agreed on all the points of the program with the exception of one which requires further elaboration and discussion” with the troika. “This discussion will occur immediately so that it can be completed in light of the meeting of euro area finance ministers” today.

At issue were cuts to pensions totaling 300 million euros ($397.515 million). All three party leaders have proposed alternative proposals to avoid pension cuts, agreeing to by cut defense spending and other expenditures.

Panos Beglitis, a spokesman for the Pasok socialist party, said in the report that his party did not support pension cuts, although all other issues have been agreed upon. Reuters reported Antonis Samaras of the New Democracy party saying, “In these difficult hours we have to look after the ordinary people, the pensioners. I haven’t got the right to not negotiate hard and I don’t care what other people think about that. We have to make sure that people will suffer less.” George Karatzaferis of the Laos party is insisting on assurance that austerity measures are legal, and may hold up the agreement even if consensus is reached on the pension cuts.

ECB President Mario Draghi announced news of the agreement, saying in the report, “A few minutes ago, I got a call from the Prime Minister of Greece saying that an agreement had been reached and has been endorsed by the major parties.”

However, not everyone is satisfied that the agreement is the best deal that could have been made. Greece’s two major labor unions called a 48-hour strike for Friday and Saturday to protest the austerity conditions, and Ilias Iliopoulos, secretary general of the ADEDY union, said in the report, “The painful measures that create misery for the youth, the unemployed and pensioners do not leave us much room. We won’t accept them. There will be a social uprising.”