Greece wants new bailout talks finished by fall

Greece wants to conclude negotiations for a second bailout by the end of the summer "at the latest", the country's new finance minister said Monday, at the start of a parliamentary debate on unpopular but crucial austerity measures.

A new €28-billion (US$40-billion) Greek austerity package and implementation law must be passed in parliamentary votes this week so the European Union and the International Monetary Fund can release the next instalment of Greece's €110-billion (US$156-billion) bailout loan.

Without it, Greece faces the prospect next month of becoming the first eurozone country to default on its debts - a potentially disastrous event that could drag down European banks and affect other financially troubled European countries.

Finance Minister Evangelos Venizelos, who only assumed the post in a June 17 cabinet reshuffle, said the €12-billion (US$17-billion) instalment will cover the country's borrowing needs until mid-September.

"And between now and the end of the summer at the latest, we must seriously negotiate the new programme with our partner - the European Commission, the European Central Bank and the IMF - and guarantee viability of the national debt with the participation of private investors internationally," Venizelos said.

Initial bailout not enough

It has become clear that the initial bailout from May 2010 is not enough to pull Greece out of its financial crisis. The country's international creditors are now discussing a second bailout, which Prime Minister George Papandreou has said will be roughly the same size as the first. Many investors, meanwhile, believe that Greek's debt burden is too great to handle without defaulting, regardless of the bailouts.

Venizelos on Monday urged Greek opposition parties to back the government in negotiations with the country's international creditors.

The main opposition leader, the conservative New Democracy party's Antonis Samaras, has so far resisted intense European pressure to back the new austerity bill. While Samaras supports cost-cutting measures and the sale of some government assets, he has called the thinking behind the austerity bill "flawed". He says tax rates should be lowered rather than raised in order to stimulate an economy in recession.

"I call on New Democracy and the other parties: Come, let's negotiate together. And once we have negotiated, we will have a better result because it will have greater national strength," Venizelos said.

Parliament is to vote on the austerity bill Wednesday, and on an additional law on implementing the measures Thursday. The new cuts have caused widespread anger, and unions have declared a 48-hour nationwide general strike for Tuesday and Wednesday to coincide with the parliamentary debate and vote.

Protesters also say they will encircle parliament on Wednesday to prevent deputies from entering the building to vote.

- AP