February 10,2012(AFP)-Greece was hit by a new barrage of strikes and protests on Friday against draconian budget cuts in defiance of a eurozone ultimatum for even tougher conditions for a debt rescue.
The new austerity measures have pushed Greece's fragile coalition government to breaking point.
But eurozone finance ministers are demanding clear commitments in a rapidly souring climate around drawn-out talks on a second rescue.
The ministers on Thursday delayed a decision on a new bailout to save Athens from bankruptcy, giving Greek officials less than a week to meet three conditions in exchange for 130 billion euros (US$172 billion) in aid.
The hard line in a new five-day deadline from the eurozone was clear: "The Greeks have to help themselves. There is no other way," French central bank governor Christian Noyer told Europe 1 radio.
But Greek unions went ahead with a 48-hour general strike against what they describe as "barbaric" wage and pension cuts. This backs up a 24-hour general strike held three days ago. More protests are planned for Sunday.
"The measures they are trying to sign and ratify will be the tombstone of Greece," said Nikos, a demonstrating pensioner.
"The people must take matters into their own hands," added Constantinos Amonas, a plastics factory worker. "They should not wait, they should not be fooled by the political parties," he added.
Greece on Thursday had announced a last-minute agreement among coalition parties on alternative ways of finding budget savings demanded by the European Union and International Monetary Fund.
But it turned out that in the eyes of eurozone finance ministers there was still a shortfall, and they were not prepared to accept a "general agreement" by Greek politicians on austerity measures.
Instead the eurozone wants cast-iron commitments on the numbers.
Eurozone ministers demanded that Greek lawmakers formally approve the measures, which include additional structural spending cuts of 325 million euros for 2012.
They also want a written pledge from coalition leaders that they will implement the reforms, Eurogroup chief Jean-Claude Juncker told a news conference in Brussels.
If those conditions are met, the Eurogroup would meet again on Wednesday, he said.
There are growing signs that the tone of exasperation over the two-year Greek crisis has risen sharply at eurozone level. The remark by Noyer, who also sits on the policy council of the European Central Bank, is one example.
"Greece still has some homework to do," added Dutch Finance Minister Jan Kees de Jager.
Financial markets reacted negatively to the latest developments, with stock exchanges falling in Asia and Europe. Analysts said that sentiment on the oil market was also hit, pushing down prices.
If Greece does not obtain aid soon, it could default on 14.5 billion euros in bond reimbursements on March 20, which would roil the eurozone and possibly hamper a global economic recovery.
But the tough position by European leaders echoes a change recently in the tone of comment which until now held that a departure of Greece from the eurozone could not be contemplated.
Greek Finance Minister Evangelos Venizelos told reporters in Brussels that Greece's place in the eurozone was in the hands of the country's conservative party, a coalition partner with his socialists.
"It must decide -- if they want (Greece) to stay in the eurozone, they have to say so clearly. If they don't, then they have to say that clearly as well," Venizelos said.
And analysts warn that even if Greek manages to cut its 350-billion-euro in debt, it will still face serious challenges.
Athens could struggle to boost crucial tax receipts and the economy is not poised to compete effectively against global rivals, economists note.
EU economic affairs chief Olli Rehn said eurozone partners were "seriously considering" opening an escrow account for Greece, which would block a portion of state revenues to guarantee the repayment of bailout loans.
A Franco-German proposal is "one possibility for reinforcing surveillance and effectively implementing the programme," he said.
But whether a rescue package consisting of 130 billion euros from the European Union and International Monetary Fund and a 100-billion-euro cut in debt owed to private creditors will resolve the crisis "is a very open question," Berenberg Bank chief economist Holger Schmieding said.
He forecast "tense days ahead" as Greek unions again filled the streets with angry protesters to slam what many Greeks see as a diktat by EU leaders, led in their eyes by German Chancellor Angela Merkel.
"The stakes are now very high," Barclays Capital Research economists noted.
The new austerity measures have pushed Greece's fragile coalition government to breaking point.
But eurozone finance ministers are demanding clear commitments in a rapidly souring climate around drawn-out talks on a second rescue.
The ministers on Thursday delayed a decision on a new bailout to save Athens from bankruptcy, giving Greek officials less than a week to meet three conditions in exchange for 130 billion euros (US$172 billion) in aid.
The hard line in a new five-day deadline from the eurozone was clear: "The Greeks have to help themselves. There is no other way," French central bank governor Christian Noyer told Europe 1 radio.
But Greek unions went ahead with a 48-hour general strike against what they describe as "barbaric" wage and pension cuts. This backs up a 24-hour general strike held three days ago. More protests are planned for Sunday.
"The measures they are trying to sign and ratify will be the tombstone of Greece," said Nikos, a demonstrating pensioner.
"The people must take matters into their own hands," added Constantinos Amonas, a plastics factory worker. "They should not wait, they should not be fooled by the political parties," he added.
Greece on Thursday had announced a last-minute agreement among coalition parties on alternative ways of finding budget savings demanded by the European Union and International Monetary Fund.
But it turned out that in the eyes of eurozone finance ministers there was still a shortfall, and they were not prepared to accept a "general agreement" by Greek politicians on austerity measures.
Instead the eurozone wants cast-iron commitments on the numbers.
Eurozone ministers demanded that Greek lawmakers formally approve the measures, which include additional structural spending cuts of 325 million euros for 2012.
They also want a written pledge from coalition leaders that they will implement the reforms, Eurogroup chief Jean-Claude Juncker told a news conference in Brussels.
If those conditions are met, the Eurogroup would meet again on Wednesday, he said.
There are growing signs that the tone of exasperation over the two-year Greek crisis has risen sharply at eurozone level. The remark by Noyer, who also sits on the policy council of the European Central Bank, is one example.
"Greece still has some homework to do," added Dutch Finance Minister Jan Kees de Jager.
Financial markets reacted negatively to the latest developments, with stock exchanges falling in Asia and Europe. Analysts said that sentiment on the oil market was also hit, pushing down prices.
If Greece does not obtain aid soon, it could default on 14.5 billion euros in bond reimbursements on March 20, which would roil the eurozone and possibly hamper a global economic recovery.
But the tough position by European leaders echoes a change recently in the tone of comment which until now held that a departure of Greece from the eurozone could not be contemplated.
Greek Finance Minister Evangelos Venizelos told reporters in Brussels that Greece's place in the eurozone was in the hands of the country's conservative party, a coalition partner with his socialists.
"It must decide -- if they want (Greece) to stay in the eurozone, they have to say so clearly. If they don't, then they have to say that clearly as well," Venizelos said.
And analysts warn that even if Greek manages to cut its 350-billion-euro in debt, it will still face serious challenges.
Athens could struggle to boost crucial tax receipts and the economy is not poised to compete effectively against global rivals, economists note.
EU economic affairs chief Olli Rehn said eurozone partners were "seriously considering" opening an escrow account for Greece, which would block a portion of state revenues to guarantee the repayment of bailout loans.
A Franco-German proposal is "one possibility for reinforcing surveillance and effectively implementing the programme," he said.
But whether a rescue package consisting of 130 billion euros from the European Union and International Monetary Fund and a 100-billion-euro cut in debt owed to private creditors will resolve the crisis "is a very open question," Berenberg Bank chief economist Holger Schmieding said.
He forecast "tense days ahead" as Greek unions again filled the streets with angry protesters to slam what many Greeks see as a diktat by EU leaders, led in their eyes by German Chancellor Angela Merkel.
"The stakes are now very high," Barclays Capital Research economists noted.
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