ATHENS, Greece -- The head of a small center-left partner in Greece's governing coalition on Tuesday ruled out new reforms demanded by bailout creditors, which he said would "crush" labor rights in the debt-crippled country.The announcement by Fotis Kouvelis of the Democratic Left party is another snag in the country's ongoing efforts to agree on a package of cuts and reforms that Parliament must approve to keep receiving bailout money Greece desperately need to stay solvent.He spoke after a meeting between the heads of the three parties in the four-month-old, conservative-led coalition.The apparent new setback follows a month and a half of tortuous talks with the country's creditors -- and between the three party leaders -- during which the government in Athens has failed to strike a deal on the austerity package.
Since losing access to money markets in 2010, Greece has survived on international rescue loans, granted on condition of harsh spending cuts to reduce its inflated budget deficits.Unless Athens manages to reach an agreement with austerity inspectors from the European Union, International Monetary Fund and European Central Bank on the 13.5 billion euros cuts in 2013-14 it will not receive the next vital loan installment. That would force the country to default on its debts -- it will run out of cash in mid-November -- and possibly leave the 17-member eurozone.
Kouvelis did not specify what particular demands he objected to. Press reports have said the so-called EU, IMF and ECB troika are pressing for a new cut in minimum wages and further reductions in the layoff compensations."It is not a structural reform to demolish whatever rights have remained," Kouvelis told journalists.He argued that new a dilution of labor rights was more than austerity-fatigued Greeks can take, and will worsen a five-year recession and record-high unemployment."I cannot accept such demands," he said.Greece is heading for a sixth year of recession, which is expected to reach a cumulative 25 percent at the end of 2013. Unemployment is around 25 percent, the highest in decades.Earlier Tuesday, Greece raised 1.625 billion euros in an auction of 13-week treasury bills at a slightly lower rate of 4.24 percent.The Public Debt Management Agency said the rate had dropped from 4.31 percent at the previous such auction on Sept. 18. Demand for the short-term debt Tuesday was 1.9 times the amount on offer.