Greek parties fail to agree on austerity cuts

Before leaving Athens, Greek Finance Minister Evangelos Venizelos said he remained hopeful of winning the bailout loan from eurozone finance ministers.

The three coalition partners in Prime Minister Lucas Papademos' government held nearly eight hours of talks overnight on a rescue plan for the debt-strapped Greek economy, Papademos' office said.

They had agreed on all "points of the plan except one", according to Papademos's office.

The sticking point was "the reduction of pensions," a government source told AFP after the marathon talks, which began Monday and broke up in the early hours of Thursday.

Government spokesman Pantelis Kapsis said they still needed to cut €600 million, €325 million of which would be obtained by pensions cuts.

Greece's politicians must reach a deal before their country can receive vital bailout funding from the European Union and International Monetary Fund.

The bailout is vital to prevent Greece, a eurozone member, from defaulting on €14.5 billion of payments to bond holders due on 20 March.

All eyes are on Greece amid fears a failure to meet its debt obligations could spark a domino effect that undermines the entire euro common currency project.

Greek party leaders on Wednesday received a 50-page document outlining the austerity measures demanded to trigger new loans under a €130-billion bailout plan agreed in October.

According to the Greek press, the measures under consideration included slashing the minimum wage by 22%, sweeping cuts to salaries and pensions and 15,000 public sector job losses.

Far-right leader Georgios Karatzaferis was the first to emerge from the coalition talks, denouncing the troika for heaping unreasonable pressure on the Greek government to enact more painful cuts to public spending.

Conservative leader Antonis Samaras stressed that "talks will continue on the question of pensions."

Greece has run up total debt of about €350 billion, roughly 160% of its gross domestic product, and the IMF has insisted that level be brought down to a maximum of 120% of GDP in 2020.

If the Greek parties do manage to overcome their differences, the new programme of reforms will be put before the national parliament on Friday, ahead of a vote on Sunday. In principle, the government coalition can rely on support from 255 of the 300 deputies.

The consequences of the austerity measures would be heavily felt in Greece, where many families are already feeling the pinch from earlier austerity packages.

Unions have called for protests to be held late Thursday, two days after a general strike.

The political stakes are also high as the parties prepare for early legislative elections in April