Post date: Feb 05, 2012 3:41:49 PM
ATHENS, GREECE (FEBRUARY 5 2012) (REUTERS) - Greece's finance minister has warned his country has just hours before the euro zone abandons Greece to its fate on Sunday (February 5).
Greece's prime minister scrambles to convince lenders and politicians to sign off on a 130 billion euro rescue, after his finance minister warns just hours remain before the euro zone abandons the country to its fate.
Prime Minister Lucas Papademos, a technocrat appointed in November, is trying to ensure cash-strapped Greece avoids sinking into a chaotic default when big bond redemptions come due next month.
He and his finance minister Evangelos Venizelos went in for meetings with the so-called troika monitors from the European Central Bank, European Union and International Monetary Fund to agree on at least a preliminary deal of reforms included in the bailout.
But not before Venizelos said Athens was on "a knife edge" and had only until Sunday night to clinch a second financing package from lenders.
Euro zone ministers bluntly told Venizelos on Saturday they were ready to abandon Greece without proof it could push through painful cuts.
The talks have failed after days to resolve the thorny issue of cutting wages and spending.
Worried Greeks gathered outside the Prime Minister's office where the troika meeting was being held.
While many Greeks - including the business sector, unions and political opposition leaders - oppose a conditional deal with the troika the demonstrators in this silent protest quietly hope Athens will avoid an exit from the euro.
"We are concerned that Greece may be one step from a catastrophic exit from the euro and consequently the European Union, which would be a complete nightmare. We believe that our politicians may not fulfill their obligations so that is why we came here to hold a silent demonstration," university professor, Manos Matsaganis, said.
"They have to act responsibly and try to keep Greece within the eurozone according to what it has already agreed to do," retired professor, Dimitris Dimitrakos, said.
Greece complains the troika has stubbornly refused to yield on demands to cut the minimum wage level, axe holiday bonuses and fire public sector workers.
If Papademos can clinch a deal with the troika he then faces an even tougher task convincing party chiefs in his own national unity coalition to back the reforms demanded by the lenders at the risk of ruining their chances at national elections expected in April.
The lack of agreement has kept financial markets on tenterhooks as investors fret a messy default could cause shockwaves across the financial system, triggering a credit crunch and sending the global economy back into recession.