Greece struggles on reform, lenders may face rising (Reuters)

ATHENS (Reuters) ? Greece's government struggled on Friday to agree tough labor reform that appeases both wary political leaders and irate lenders faced with a rising bill to save the country from bankruptcy.

Athens is under pressure to wrap up talks on a bond swap and a 130-billion-euro bailout to avert a chaotic default, but hopes of an imminent deal faded after euro zone finance ministers put off a meeting expected on Monday to finalize the rescue.

The ministers instead may meet later next week, Eurogroup chief Jean-Claude Juncker said.

Athens has repeatedly said the talks are in their final stage but has failed to secure either deal after weeks of wrangling, largely over concern that the rescue plan will not do enough to bring Greece's debt burden under control.

Euro zone governments may now have to cough up an extra 15 billion euros in addition to the 130 billion euros agreed in October because of funds needed to recapitalize tottering Greek banks, European Union sources said.

Finance Minister Evangelos Venizelos met officials from the so-called troika of foreign lenders on Friday in a bid to agree details on wage cuts and bank recapitalization before they are presented to political leaders for approval on Saturday.

"We are having difficult negotiations and have difficult decisions to take," said Greek government spokesman Pantelis Kapsis. "We have to deal with political issues which are open and difficult."

Without a deal on the bond swap and bailout, Athens risks default when 14.5 billion euros of bonds fall due in March. Investors fear this could in turn sow panic across financial markets and push the global economy back into a recession.

A bond swap, under which banks and insurers take real losses of about 70 percent on Greek debt they hold, is largely in place but yet to be sealed over concerns that public creditors like the European Central Bank will have also have to chip in.

Greece's foreign lenders, on the other hand, have yet to sign off on the entire bailout on doubts over Athens' commitment to reforming the Greek economy to make it more competitive.

ALTERNATIVE SOLUTIONS

Once Athens nails down details on reforms with lenders, Papademos faces the tricky task of convincing the three party chiefs in his coalition to back the unpopular reforms just a few months before the country heads to elections.

A senior Greek government official dismissed reports that Papademos is considering resigning if he fails to convince them, saying: "There is no such thing. No such issue has come up."

Papademos is expected to convene a meeting of the socialist, conservative and far-right leaders in his coalition on Saturday to persuade them that Athens will have no choice but to default if they fail to approve the reforms.

Kapsis, the government spokesman, suggested Papademos would try to offer alternative proposals to the party chiefs in a bid to win their backing, though he warned each one would entail pain for Greeks reeling from wave after wave of austerity.

"It's not all black and white. There are packages of solutions with alternatives," said Kapsis.

"No matter what decision we take it will have a cost."

To reduce labor costs, the troika of European Central Bank, European Union and International Monetary Fund lenders want Greece to make holiday bonuses in the private sector optional and cut the minimum monthly wage set at about 750 euros now.

In a sign that implementing the reforms will be difficult even with political approval, Greek employers and unions said further salary cuts were non-negotiable and instead proposed reducing taxes and social contributions.

The main private sector union GSEE also rejected employers' proposal for a wage freeze in 2012 and 2013.

"Competitiveness on a national level is affected more by factors like bureaucracy -- which is fed by complex regulation, state intervention, the tax system, corruption and anti-business mentality rather than wage costs," the employers and unions said in the joint letter to Papademos on Friday.

In a rare bright spot for Athens, a finance ministry official on Friday said Greece's 2011 budget deficit will be smaller than expected at between 9.1 and 9.4 percent of GDP, thanks to an emergency property tax.

That is still above initial EU/IMF targets but might help Athens persuade its lenders that it will implement long-delayed reforms and slash spending further. Athens had previously estimated the deficit would be above 9.5 percent of GDP.

Greece is in its fifth year of recession, with anger bubbling over rising unemployment, tax hikes and austerity measures imposed by lenders.

(Additional reporting by Jan Strupczewski in Brussels; Writing by Deepa Babington; Editing by Toby Chopra)

Source: http://us.rd.yahoo.com/dailynews/rss/world/*http%3A//news.yahoo.com/s/nm/20120203/wl_nm/us_greece

the lion king 3d the lion king 3d missoni maker faire the hub the hub pat robertson