Greece faces critical hour as EU patience wearing thin

The Prime Minister Lucas Papademos, had to put on a brave face yesterday as he tried to get leaders of the three parties in his government to sign off on the terms of a €130 billion rescue, which Greece needs soon to avoid a chaotic debt default.

Papademos said in a statement the party chiefs - who may face angry voters in parliamentary polls as soon as April - had agreed measures including wage cuts and other reforms as part of spending cuts worth 1.5 percent of gross domestic product.

But a spokesman for the PASOK socialist party said a number of major issues demanded by the "Troika," representing Greece's EU, European Central Bank and IMF lenders, remained unresolved.

Talks on the new bailout, which would be Greece's second since 2010 - and an accompanying deal to ease the country's huge debt burden via its private creditors accepting deep losses on the bonds they hold - have dragged on for weeks, stretching the EU's patience to breaking point.

"Things are very tough and difficult," a Greek government official said, requesting anonymity.

Now the parties - PASOK, the conservative New Democracy and far-right LAOS - must respond to a working group of senior euro zone finance ministry officials who are preparing for a meeting of their ministers later in the week.

"The political leaders must give their response in principle by noon tomorrow, so that it can be taken to the Euro Working Group in Brussels," said PASOK spokesman Panos Beglitis.