Greek bailout talks entered a new round of brinkmanship on Tuesday, as euro-zone finance ministers delayed a meeting to approve a new bailout and debt restructuring for Athens, which worked to assure them it is committed to new austerity measures as a debt-redemption deadline looms.
The ministers put off the talks in Brussels, which they had scheduled for Wednesday, and replaced them with a teleconference, saying Greek political leaders haven't given clear pledges on the implementation of fresh austerity measures.
Late Tuesday, an official in Prime Minister Lucas Papademos's office said those issues had been resolved. Socialist party leader George Papandreou signed a written pledge demanded by Europe, while Antonis Samaras, who leads the opposition New Democracy party and who polls show is most likely to become the country's next prime minister, is expected to do so on Wednesday.
Mr. Samaras has been an unbending critic of the austerity program, saying it has sent the economy into a deep recessionary spiral.
Tuesday's delay added tension to efforts to seal the bailout, for at least €130 billion ($172 billion), and a linked debt-restructuring deal Athens has been negotiating with private creditors. Germany and other creditor euro-zone governments have voiced growing distrust in Greece's political leaders in recent weeks.
Greece needs to complete the debt restructuring and lock in further bailout aid by late March to avoid defaulting on a €14.5 billion debt redemption.
A Greek government official on Tuesday acknowledged that a delay in approving the aid package would force the country to push back the launch of its public offer for the proposed debt-exchange plan. That public offer was tentatively penciled in for Friday.
The swap will need several weeks to close, given the need for banks and other creditors to sign off at senior levels on the complicated legal documentation. Last week, EU officials said Greece had already passed deadlines set to comfortably complete all of the technical work in time.
Hours after European Economics Commissioner Olli Rehn on Tuesday said he expected the meeting to go ahead on Wednesday and that it was "essential" it should do so, Jean-Claude Juncker, the head of the Eurogroup of finance ministers, said there would be no meeting.
"I have decided to convene ministers to a conference call [on Wednesday] in order to discuss the outstanding issues and prepare the ordinary meeting of the Eurogroup on Monday, 20 February, 2012," he said.
A senior European official had said earlier Tuesday that major decisions were unlikely at Wednesday's teleconference, adding that some governments were determined that Greece's leaders shouldn't be given any leeway to escape the tough conditions associated with the package. The finance ministers have an already scheduled meeting in Brussels on Monday and Tuesday.
Euro-zone leaders have ratcheted up the pressure on Greece even as the country's political leaders pushed deep new austerity measures through Parliament over the weekend to the backdrop of large-scale protests.
Mr. Juncker on Tuesday said additional time is needed for Greece and its troika of official lenders—the European Commission, the International Monetary Fund and the European Central Bank—to complete "technical work…in a number of areas.…Furthermore, I did not yet receive the required political assurances from the leaders of the Greek coalition parties on the implementation of the program."
None of the unresolved issues Mr. Juncker listed as unresolved were new. He said the troika and Greece needed to agree on the closure of a €325 million fiscal gap that Athens had promised to fulfill. He also said further work was needed on the debt-sustainability analysis, a report the troika is drawing up that is supposed to identify how much assistance Greece will need to cut its ratio of government debt to gross domestic product to 120% by 2020.
Earlier Tuesday, Greece's cabinet approved new measures to plug the €325 million gap, with one official saying the new measures were much more "concrete" than what Greece had proposed at last week's Eurogroup meeting. "The savings will come from further cuts in the public investment budget, defense spending and health care," a second Greek official said.
On Monday, Luxembourg Finance Minister Luc Frieden said he couldn't rule out Greece exiting the euro zone. Mr. Frieden said if Athens fails to fully comply with the terms of its bailout programs, it would exclude itself from the currency union.
"The key lies with Greece. Therefore, if the Greek people and the Greek political elite don't apply all the conditions…they exclude themselves from the euro zone," Mr. Frieden said, speaking at an Atlantic Council event in Washington after talks with senior U.S. Treasury officials.
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