Less debt, more dissent
Prime Minister George Papandreou admitted on Wednesday that Greece is trying to find ways to lighten its debt load ahead a European Union leaders? summit later this month but there were suggestions within his party that some MPs might not vote for some of the reforms the premier is hoping to present at the talks.
During a cabinet meeting, Papandreou said that the government is involved in negotiations with the eurozone and the International Monetary Fund about changing the private sector involvement (PSI) that was agreed on July 21. That foresaw a haircut of 21 percent for Greek bond holders but this figure could now become as high as 50 percent, four eurozone officials who wished to remain anonymous told Reuters.
?We are negotiating in every way we can to reduce our debt,? said Papandreou. ?These are complicated negotiations but this is where the big problem lies. I wish we could bring down our debt over the next 10 years but we do not have that much time.?
Papandreou spoke with IMF Managing Director Christine Lagarde late on Tuesday in an effort to set up a meeting in Washington. Papandreou is also thought to be trying to arrange talks with US Treasury Secretary Timothy Geithner and President Barack Obama.
The Greek prime minister spoke with Eurogroup chief Jean-Claude Juncker, who he is due to meet in Brussels on Thursday. Papandreou will also hold talks with European Council President Herman Van Rompuy.
Papandreou tried to use Wednesday?s cabinet meeting to remind his ministers that they have to respond to the attacks from main opposition New Democracy, which he described as ?propaganda and shameless lies.?
However, it seems the most immediate threat to Papandreou and his government lies within PASOK. Addressing Parliament on Wednesday, Finance Minister Evangelos Venizelos urged MPs to approve a bill containing a raft of tax and public sector reforms ahead of meetings of EU and eurozone leaders scheduled for October 23.
The legislation contains an article abolishing collective wage bargaining, a reform reportedly demanded by the troika. Ex-Labor Minister Louka Katseli told Venizelos there was no way this article would pass through the House. In private other PASOK deputies said the same thing. Venizelos attempted to quell the rebellious mood by saying he was willing to discuss the legislation right up to the day it would be voted on.
