Greek Leaders Fail to Reach Consensus on Austerity

At an emergency meeting Friday, the country's political leaders failed to agree on the austerity measures proposed by the government, but Prime Minister George Papandreou said there was still the hope that an agreement would be reached.

"Basically, there are many points on which we can agree," he said, addressing the nation in a televised speech. "But there is a need for political will on all sides."

"Over the next few days, we will continue our efforts to reach a consensus, he said, adding that" the government has assumed responsibility for extracting the country from the crisis and do so with or without consensus. "

But leaders of opposition parties have refused to fall behind the president, Karolos Papoulias, who had convened the meeting. The measures were proposed by the Socialist government of Mr. Papandreou.

The purpose of Friday's meeting was to convince the representatives of the European Union and the International Monetary Fund that Greece is serious about repairing its finances and has the political will to impose increases of taxes and spending cuts on a public already weary after a year of belt tightening. The effort came as speculation mounted about the ability of the Greek government to avoid default, which would very likely lead to another financial crisis across the euro area.

Olli Rehn, European Commissioner for Economic and Monetary Affairs, said in a statement that the committee "regrets the failure of the Greek party leaders to reach a consensus on economic adjustment to overcome the current crisis of debt."

"An agreement must be found quickly," said Rehn. "Time is running out."

Earlier in the day, Antonis Samaras, the leader of the country's main conservative opposition party, New Democracy, said he would not back a program that "shaving Greek economy and destroy society ".

He called for the renegotiation of the terms of an agreement with the union and the IMF, which last May has promised € 110 000 000 000 in loans to Greece in exchange for the country's finances in order.

Mr. Samaras also reiterated calls for an alternative approach to the finances of Greece, one that has favored tax cuts and accelerated privatization of public assets.

Other leaders have also criticized the Socialists' plan. Among them was the leader of the Communist Party, Aleka Papariga, who said the Greeks were subject to "ideological terrorism" and must not yield to the "coercive dilemmas."

On Thursday, the group leader of euro zone finance ministers, Jean-Claude Juncker, said again that the EU would be unlikely to intervene if the IMF withheld its portion of a fifth round of funding emergency to Greece - 12 billion euros (17 billion dollars) should be paid next month.

Lenders of Greece require additional steps after the country missed its target deficit for 2010, with the objectives for this year and beyond the reach further. A mission of the European Commission, IMF and European Central Bank is trying to compile a long-awaited report on the progress of the Greek government, after which European ministers will decide how to react.

The situation is difficult because public opinion in creditor countries hardens and some governments in the euro area, including the Netherlands, made it clear they will not step in and fill the funding gap if the IMF does not believe it can justify the release of his party. This has increased pressure on the Greek government to accept revenue measures, including privatization, it will be enough to win the IMF

Within the Group of 8 meeting in Deauville, France on Friday, the U.S. has expressed its support for European efforts to avoid a debt crisis in Greece from propagating in a bigger problem for the Monetary Union Euro, two European diplomats who were present during the discussions but declined to be named.

The Americans said that Europe's ability to manage these problems was important for the United States, but that Obama did not specify what assistance the United States would be willing to extend to the Except for statements of support, the diplomats said.

EU leaders said during the discussions that Europe's problems were limited to Greece and they did not think Greece might infect the rest of the eurozone, which covers 17 countries. They underlined the continued strength of the euro vis-à-vis the dollar as evidence that the situation was still under control.

The leaders agreed, however, that Greece should be more aggressive in adjusting its own finances, and said they believed the country would finally be able to avoid default or restructure its debts .

Greek media speculated last week that the country will hold early elections or perhaps return to the drachma. European Commissioner for Maritime Affairs, Maria Damanaki, a Greek socialist, oil on the fire when she said Wednesday that negotiations were already in place on the way out of Greece in the euro area.

Further tax increases and cuts in public spending, the program of the Greek government austerity drive also includes a proposed privatization expects sales in the issues of public services and state assets, including the national telecommunications company OTE .

On Friday, Deutsche Telekom, which already holds a 30 percent in OTE, confirmed receiving a letter from the Greek finance ministry asking to hold talks to discuss increasing its stake.

But a few dozen employees of the telephone company protested against another sell-off by blocking one of the busiest roads of Athens, in front of company headquarters during the morning rush hour on Friday .