Germany and France are pressuring financially troubled Greece to quickly complete deals to cut its debt and impose more unpopular austerity measures.
After meeting in Paris Monday, German Chancellor Angela Merkel and French President Nicola Sarkozy pointedly told the Athens government it would not get a second $171 billion bailout to avert a default on its loans next month, if it did not complete its negotiations with private creditors to cut in half the amount it owes them and cut its own spending.
Greece has been negotiating for weeks with international financial institutions to cut $131 billion of its debt, but has been unable to complete an agreement. At the same time, the Greek government has encountered resistance at home to demands by the European Union, the European Central Bank and the International Monetary Fund that it cut the wages of Greek workers, before securing the new bailout, the country's second in two years.
Ms. Merkel said the public lenders' demands “are on the table. Something needs to happen quickly.”
Greece's creditors say the wage cuts are necessary to make it more competitive with its trading partners. But Greek unions and employers have resisted the cuts, with the unions calling for a 24-hour strike on Tuesday to show their opposition. One union leader, Stathis Anestis, said European leaders have no right to undermine labor agreements.
Caretaker Greek Prime Minister Lucas Papademos has been attempting to get the country's socialist, conservative and far-right political parties to agree to support the new austerity measures. International lenders have demanded the broad agreement among Greece's fractious parties, saying they are fearful that after a national Greek election in the coming months, lawmakers would renege on government spending cuts.
Political leaders had planned further negotiations Monday, but postponed the talks until Tuesday.