Greece has one day left to clinch a eurozone bailout and a bond swap with creditors to manage its crushing debt repayments, the finance minister said Saturday, warning that talks were "on a knife edge."
"The moment is very critical," Evangelos Venizelos told reporters after a telephone conference with fellow eurozone finance ministers, which he described as "very difficult.".
"Everything must be concluded by tomorrow night... so that we can be within the timetable given the bond maturities in March," the minister said.
"We are on a knife edge."
Athens has been negotiating with the European Union, International Monetary Fund and European Central Bank on further action needed to unlock a new rescue deal worth 130 billion euros ($171 billion).
Pressure is also mounting for a deal with private lenders to wipe out part of the 350-billion-euro Greek debt, with Athens facing imminent loan repayments of 14.4 billion euros ($19 billion) on March 20.
Venizelos said two major points of contention with the EU and IMF remained open -- controversial labour cost cuts, and new fiscal measures to address slippage to deficit targets owing to a greater-than-forecast recession.
He said the time had come for the coalition of socialist, conservative and far-right parties backing the Greek interim government to make "a decision and a commitment" to pave the way for agreement.
Prime Minister Lucas Papademos is expected to summon the coalition party leaders to a meeting on Sunday.
But the outcome is unclear, as all three parties have expressed misgivings about the additional fiscal reforms demanded by Greece's creditors.
Papademos has reportedly threatened to resign if his coalition backers reject the demanded austerity measures, though government spokesman Pantelis Kapsis refused to confirm this.
The coalition leaders are strongly opposed to demands for further civil service cuts, now reportedly affecting teachers and military staff, and for a reduction in the minimum wage which now stands at 750 euros.
Defence Minister Dimitris Avramopoulos warned Saturday that "social tolerance has reached its limit" in Greece after two years of austerity.
"I fear society will not be able to respond to the asphyxiating terms being imposed," Avramopoulos told financial daily Imerisia.
A report Saturday said that agreement had been reached to trim Greece's debt by 170 billion euros, compared to around 100 billion previously, with the ECB and eurozone central banks now joining banks in the write-off initiative.
"The deal is expected to close on Tuesday," a eurozone source told Ta Nea daily.
The newspaper added that the ECB would write down around 50 billion euros worth of Greek bonds, and eurozone central banks adding another 10 billion.
Meanwhile, Venizelos said that a planned meeting by eurozone ministers on Greece originally scheduled for Monday would now be held on Wednesday.
Representatives of private holders of Greek debt are returning to Athens this weekend for more negotiations on a crucial write-down Greece needs to avoid sovereign default.
The Institute of International Finance, the global banking organisation leading the debt write-down talks, said in an email to AFP they included its managing director Charles Dallara and Jean Lemierre, adviser to French bank BNP Paribas.
Josef Ackermann, the chairman of the IIF and the head of Deutsche Bank, Germany's biggest lender, also said he would be flying to Greece later Saturday.
Speaking in a debate at the Munich Security Conference, Ackermann said, "I think we are in a make or break situation and Greece plays a very important role.
"If we find a solution in the next few days, I think we are on the right track," he said.
Ackermann said the private investors had been "extremely generous" in the negotiations with Greece by offering "a loss of over 70 percent" on their bond portfolios.
"I can only ask other constituencies to do the same," he said, in reference to governments and EU institutions such as the ECB.
"I think we are getting out of the crisis and markets are recognising that. But we have to fix the Greek problem," the banker said.
"If we see Greece collapsing, I think we are opening a Pandora's box."
