Greece debt talks continue, focus shifts to Brussels meet

Greece failed to finalise terms for a crucial euro 130 billion bailout on Thursday, but Finance Minister Evangelos Venizelos headed to Brussels to meet top European Union (EU) officials, hoping to rescue the agreement and stave off bankruptcy.

The Athens talks stalled after leaders of the three parties backing Greece's coalition government approved sweeping new austerity measures but failed to agree to creditors' demands to make euro 300 million ($398 million) in pension cuts.

Venizelos issued a dramatic plea to the coalition leaders to swiftly resolve their differences, warning that Greece's "survival over the coming years" depends on bailout and a related debt-relief agreement with private creditors.

"It will determine whether the country remains in the eurozone or whether its place in Europe will be endangered," he said.

"There is no room for any other expediency: we must look Greeks in the eye, look at the national interest and the interest of our children."


Major Asian stock markets fell, with sentiment hit by the snag in Greece's debt talks and a rebound in Chinese inflation. Hong Kong's Hang Seng was down 0.2 per cent.

Venizelos' meeting with finance ministers from the 16 other nations that use the euro is expected to start at 1700 GMT.

Debt inspectors from the European Union, the European Central Bank and the International Monetary Fund - known as the troika - held talks for five hours through the night with Prime Minister Lucas Papademos, Venizelos and Labor Minister Giorgos Koutroumanis. But they failed to resolve the latest sticking point: a demand for substantial cuts in supplementary pensions.

The issue that has threatened to derail the talks concerns cuts of about euro 300 million that must be made so Greece can reach its fiscal targets for 2012. At stake is the euro 130 billion bailout that will stave off Greece's bankruptcy.

It was not clear whether Papademos would meet with coalition backers - socialist George Papandreou, conservative Antonis Samaras and George Karatzaferis, leader of the rightist LAOS party.

On Wednesday, the three leaders held talks with Papademos for seven and a half hours and backed a major new austerity program that includes a 22 per cent cut in the minimum wage, firings of civil servants, and an end to dozens of job guarantee provisions.

Athens has already accepted a demand to fire up to 15,000 workers in the public sector in 2012.