Greece struggles to clinch rescue

Greece grappled on Thursday with the notion of direct fiscal control from Brussels as it struggled to finalise a eurozone debt rescue and overcome mounting EU scepticism in time to avert bankruptcy. As patience ran thin in Europe with Greek reform delays, tempers were rising in Athens towards a perceived toughening of rescue programme conditions and criticism of planned early elections in April. European Union officials on Wednesday made clear they were stepping up surveillance of Greek state revenues and expenditure, with snap elections a cause for doubt about how reforms will be carried through. Dutch Finance Minister Jan Kees de Jager went a step further, warning on Thursday that Greece's eurozone bailout may be delayed until after the ballot. "Ideally after the elections, you want to deal with rulers that you know will give their support to the package," De Jager was quoted in an interview with the influential Dutch financial daily Het Financieele Dagblad. Prime Minister Lucas Papademos was meeting with his political allies, the socialist and conservative party leaders, his office said, ahead of a cabinet meeting on Friday. Eurozone leaders for several weeks have been negotiating Greece's desperately-needed rescue package of 130 billion euros in fresh loans and a write-down on privately-held government bonds worth 100 billion euros to avoid defaulting on debt owed on March 20. Greek lawmakers approved on Sunday creditor-mandated austerity measures, including a 22-percent cut to the minimum wage, needed to unlock the rescue funds as rioters set buildings alight in central Athens. "Soon they will tell us to abolish democracy in return for new loans," retorted Alexis Tsipras, head of the Left Coalition party and a strong critic of the 110-billion-euro EU-IMF fiscal adjustment programme signed by Greece in 2010. Citizen's Protection Minister Christos Papoutsis said additional demands on Greece would constitute "raw blackmail" and a "direct insult" to Greek dignity. "I doubt if any other parliament in the European Union could accept such a programme of fiscal management," said Papoutsis, a former EU commissioner who is now seeking a greater role in his socialist party. Greece had just managed to meet the latest EU-IMF requirements for the current financial year and secure the latest bailout, passing new unpopular legislation that caused several defections in parliament and street violence last weekend that left dozens injured and scores of damaged businesses in Athens. Main unions GSEE and ADEDY on Thursday called for another protest on Sunday, and revealed plans for another general strike, the third this year. "Democracy in Greece is irreparably hurt, it is now disabled," said GSEE chairman Yiannis Panagopoulos. Finance Minister Evangelos Venizelos said late on Wednesday that a conference call by eurozone ministers had "clarified" how to plug a 325-million-euro hole in Greece's 2012 budget and that remaining issues would be worked out by Monday. "Other issues, technical but basically political, will be prepared at a euro working group in Brussels on Sunday," Venizelos said, who warned dramatically on Wednesday that some countries no longer wanted Greece in the eurozone.. "This will in good time lead to a final decision" on the approval of the eurozone bailout and a "public announcement" on a debt swap with private creditors worth 100 billion euros on Monday, the minister said. Eurogroup president Jean-Claude Juncker had earlier said he was confident his colleagues could "take all the necessary decisions on Monday," when they next meet face-to-face in Brussels. But Juncker also signalled a tightening of oversight, flagging "a detailed list of prior actions" Greece must complete, "together with a timeline for their implementation." He said "further considerations" were necessary on how to supervise the management of the Greek state, and "to ensure that priority is given to debt servicing." But on Thursday, eurozone government sources noted that the rescue would still be insufficient to meet a debt reduction target to make the country's steep repayments sustainable in 2020. Greek newspapers on Thursday spoke of "intervention" in the country's domestic affairs after German Finance Minister Wolfgang Schaeuble questioned the wisdom of Greece holding early elections, arguing in favour of a government of technocrats similar to that of Italy. "When you look at the situation in domestic Greek politics ... the question is: who is going to guarantee that what we decide now will also be valid after the elections?" Schaeuble told SWR radio on Wednesday. "Anyone who looks at the progress that Italy has made under the Monti government should actually consider it. I don't know. I can't prescribe that to the Greeks," Schaeuble said. "We want to do everything we can to help Greece ... we can help but we are not going to pour money into a bottomless pit," he added. His comments sparked an angry reaction from Greece's German-educated president Carolos Papoulias, and a rebuff from New Democracy chief Antonis Samaras.