You can now read 10 articles a month for free. Read as much as you want anywhere and anytime for just 99¢.

Struggle goes on for a Greek plan

Crucial meeting delayed till Monday

Louisa Gouliamaki/AFP/Getty Images

Many analysts doubt the bailout plan for Greece can restore a country facing a fifth year of recession. The economy shrank 7 percent in the latest quarter. Above, workers clear debris after weekend rioting that destroyed dozens of buildings in Athens.

BRUSSELS - Two steps forward, one step back. So goes the frenzied effort to bail out Greece.

A meeting of the 17 euro countries’ finance chiefs to discuss Greece’s second multibillion bailout was called off last night after Athens failed to deliver on several demands made by its partners in the currency union.

Continue reading below

The eurozone wants much tougher guarantees from Athens before giving it an extra $171 billion in rescue loans, on top of $145 billion already granted, raising fears the deal could still fall apart.

Today’s now-canceled meeting was expected to give the green light for a bond-swap deal with private creditors designed to slice some $131.3 billion off Greece’s debt. The swap deal, which will take several weeks to implement, has to be finalized by March 20, when Greece faces a $19 billion bond redemption it cannot pay.

Tensions between Athens and other European capitals have hit new highs this week. Although the European Union is officially still warning of the far-reaching dangers of a disorderly default by Greece, some politicians have in recent weeks downplayed the effects of such an event.

Athens and the eurozone have spent much of the past two years working to avoid a default, but the measures demanded in return for the second bailout cut to the bone of Greek society and the Greek state, making it difficult it to see how the country can restore growth.

“Greece has made all the efforts that it needed to do, and the people cannot take any more,’’ said Greece’s public order minister, Christos Papoutsis. “The government is making superhuman efforts and we have reached the limits of the social and economic system. From now on, Europe has to take the responsibility.’’

While Parliament faced down violent protests over the weekend to approve a far-reaching austerity package, ministers spent hours yesterday discussing how to save an extra $426.6 million demanded last week by the eurozone.

The other finance ministers also want assurances from leaders of Greece’s two main political parties that they will implement spending cuts and reforms after national elections expected in April. That demand is especially tenuous, with some commentators questioning whether it undermines democracy in Greece.

A government official said letters from the party leaders promising implementation of the measures would be ready by this morning.

The ministers will speak in a teleconference on today and plan to meet in person on Monday in Brussels.

Loading comments...

You have reached the limit of 10 free articles in a month

Stay informed with unlimited access to Boston’s trusted news source.

  • High-quality journalism from the region’s largest newsroom
  • Convenient access across all of your devices
  • Today’s Headlines daily newsletter
  • Subscriber-only access to exclusive offers, events, contests, eBooks, and more
  • Less than 25¢ a week