Greek party leaders prepare for crucial debt talks

ATHENS, Greece — Greek coalition leaders are studying a draft deal on harsh cutbacks needed to secure a €130 billion ($170 billion) bailout that will help the country avoid a looming bankruptcy next month.

The office of Prime Minister Lucas Papademos said Wednesday that the heads of the three parties backing his interim coalition government received the draft 50-page austerity document, drawn up with the country's debt inspectors, earlier in the day.

A meeting of Papademos with the party leaders, originally scheduled for 1100 GMT, was delayed until 1300 GMT to give parties more time to study the draft.

The coalition talks have been postponed over the last three days to make time for exhaustive negotiations with representatives of the European Union, the European Central Bank and the International Monetary Fund, on whose approval the continued flow of Greece's vital rescue loans depends. Without the bailout, Greece would not have enough money to pay off a big bond redemption payment next month, triggering a default that risks sending shockwaves throughout financial markets and the global economy.

The three organizations, known collectively as the "troika", have demanded further measures to improve Greece's competitiveness and economic stability — including new private sector wage and pension cuts, public sector layoffs and cuts in health, pension and defense spending — before they approve the new €130 billion ($170 billion) bailout.

The troika's proposals have horrified unions, who held a general strike Tuesday. Greeks have already been hit with a spate of salary cuts and drastically increased taxation over the past two years, amid record-high unemployment and a five-year recession.

Labor Minister Giorgos Koutroumanis told Parliament last week that a demanded reduction in the €751 ($985) monthly minimum wage would quicken the Greek economy's contraction and hit the revenues of struggling pension funds that have already lost €20 billion ($26 billion) since 2009.

But Athens has minimal ground for maneuver. Without the rescue loans, the country will default on its massive debts in March, when it faces a €14.5 billion ($19 billion) bond redemption.

Stocks advanced Wednesday, while the euro was trading near two-month highs, as global markets were hopeful a deal would be struck in Athens. Greek shares were 3 percent up in midday trading.