Greek PM Lucas Papademos is trying to gain support from the leaders of Greece’s three parties to accept the terms of a second debt rescue bailout of 130 billion Euros ($171 billion) to prevent a disorderly default.
Greece has 14.5 billion of debt to repay on March 20th which they can’t afford without receiving outside bailout funds.
Over the week-end, Greece’s creditors, the European Union, ECB, and IMF (collectively known as Troika), called for tougher Greek austerity measures, including private sector pay cuts and firing of civil servants.
EU finance ministers told Greek leaders on Saturday that they could not move forward with an agreed deal to restructure privately held Greek debt until they guaranteed that Greece’s reform measures would be fully adopted.
Sunday’s debt talks fell apart after five hours of negotiations. Talks are expected to begin again on Monday.
Greece is currently facing a deep recession and a high unemployment level of 19%.
Greece’s two most influential labor unions are planning to conduct a 24 hour strike against the austerity measures imposed by international lenders.
Despite the economic uncertainty in Greece, some financial strategists remain optimistic that a break through will eventually occur in Greece.
Steve Saywell, head of Foreign Exchange Strategy at BNP Paribas, told Bloomberg on “The Pulse” that the market does not believe that there will be a “messy” (disorderly) default with Greece. “There is a lot at stake here” Saywell said.
He added, “Leaders of the Euro zone, particularly Merkel and Sarkozy, have worked very hard to ensure that we will get a deal.”