Negotiations between Greece and its creditors about the terms of an orderly Greek restructuring appear to have stalled in Athens, amid troika adamance that the country accept even more dramatic austerity measures in return for the aid they are expected to receive as part of a second bailout, according to the Telegraph.
Prime Minister Lucas Papademos has called an emergency meeting of party officials in an attempt to convince them to vote through the spending reforms and bring the debt swap deal to resolution.
Meanwhile, International Business Times reports that dissatisfaction with the Greek government rose to 91% in a poll two weeks ago, although the majority of respondents still supported Papademos.
A government explained to the Telegraph that it has been difficult to reach any kind of agreement with the inflexible troika. "The troika doesn't appear to be willing to accept any concessions whatsoever on reducing the minimum wage and scrapping bonuses," the aide said. "No political party is willing to move either, saying wage cuts are a red line they are simply not going to cross. You tell me how this is going to be resolved. We have no idea and we're very worried."
This impasse follows positive reports that Greece and its creditors would likely reach a deal this week, as well as the fallout of a now relinquished German proposal for Greece to give up budget control in exchange for the next bailout.
UPDATE: Our Greek contact @YanniKouts tells us that Greek politicians are likely to follow Papademos's lead and agree to the new austerity. Even so, we're wondering how much austerity the Greeks can handle—even if everything goes well they will likely have years of recession ahead.