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The discussions between the Greek government and the supervisory Troika of the European Commission, the International Monetary Fund and the European Central Bank have ground to a halt and with them, the decision for the second bailout. Sky informed that Prime Minister Lucas Papademos said he would resign if the political leaders of various parliamentary groups do not find a common platform for the future of the country, which is in line with European creditors.

The Troika’s requirement for reducing the level of private sector wages was not satisfied by the social partners, which proved to be a serious obstacle in the discussions on the new bailout. For the first time, professional organizations and trade unions have reached a consensus and refused to reduce the level of the minimum wage and cut the thirteenth and fourteenth salary in the private sector. Their arguments are that people will abruptly become poorer on the one hand, which will lead to a new serious collapse in the purchasing power of society and that workers as well as traders and industrialists will suffer losses.

The technocrats from the mission of institutional creditors do not share this view. Economists from the supervisory Troika note that in recent years, the rate of wage increases in Greece has been much higher than the growth rate of the local economy and productivity. The leader of the mission and representative of the International Monetary Fund Poul Thomsen notes that there is no magical way for Greece to regain competitiveness and one of the methods is to reduce the wages to levels appropriate to the productivity of the country.

Amandeo Altafaz, the spokesman for economic affairs commissioner Olli Rehn, stressed that Greece is a country that has been living beyond its means for many years now. He said that for a very long time before this crisis, the Mediterraneans were spending more than they had and rebalancing will undoubtedly be painful for the whole society. The speaker stressed that the European Commission cannot be blamed with mercilessness, for which some journalists attack it, because the institution is doing what it can to help the European countries in trouble recover.

Meanwhile, it became clear that the meeting of eurozone finance ministers Eurogroup, which had to consider formally the adoption of the new bailout agreement to Greece, has been postponed. It will not be held on the initially announced date – Monday, 6 February, and will be rescheduled for a later date that week.

Initially, the size of the second bailout to Greece was set at 130 billion euro but sources in Brussels quoted by in.gr argue that it may even reach 145 billion euro. Its size depends on the results of the debt haircut and on how the obligations of Greece to private creditors in the coming years will shape.

Amandeo Altafaz said that negotiations with the private sector on the reduction of the Greek debt (PSI) are a highly complex process, but there is clear will on all sides to find agreement on a voluntary basis.

Signing the agreement for the new loan from Europe and the PSI process should be completed soon, because in March, Greece must pay the duties on its foreign loans that exceed 14 billion euro. The country does not avail such funds and according to the original data released in the Greek press, the budget deficit for 2011 is between 9.5% - 9.1% of GDP.

Discussions between the government and the supervisory Troika continue, and late on Friday, Prime Minister Lucas Papademos met in stages first with the Minister of Finance Evangelos Venizelos and then, with the President of the Bank of Greece George Provopoulos. In the early hours of the day, the mission of creditors met with Venizelos confidentially. The meeting of political leaders will take place over the weekend, when they must agree on the general framework of economic and structural reforms that should be carried out in the country, and to reach consensus on the level of wages in the private sector.