Greek austerity plans not ready, say eurozone ministers Published duration 9 February 2012

media caption German Finance Minister Wolfgang Schaeuble: Negotiations 'haven't come far enough'

Eurozone ministers have cast doubt on Greece's ability to push through austerity measures needed to release a 130bn euro ($170bn; £110bn) bailout.

At a meeting of finance ministers in Brussels, Germany's Wolfgang Schaeuble said a plan agreed by Greece's fragile coalition after days of talks was "not at a stage where it can be signed off".

The EU and IMF demanded stringent cuts in return for the bailout money.

Unions have already called a 48-hour strike in protest at the measures.

The BBC's Chris Morris, in Brussels, says European ministers want to see more evidence that the measures will actually be implemented.

There is also serious concern that the overall plan for Greece - involving the new bailout as well as an agreement for private banks to write off a substantial chunk of Greek debt - still doesn't do enough to put the country on a sustainable economic path, our correspondent says.

Luxembourg's Prime Minister Jean-Claude Juncker, head of the so-called eurogroup of finance ministers, also said he doubted whether the Greek plan was ready for approval.

"I do not have reasons to believe that there will be a definitive deal this evening," he told reporters as he arrived for the Brussels meeting.

But he hailed the progress Greece had made and said eurozone countries were likely to thrash out a deal with Athens by next week.

Greece is trying to negotiate the bailout from the EU and International Monetary Fund (IMF).

It is the second such bailout, and lenders insisted on more austerity measures in return for the loan.

The mood among eurozone countries appears to be toughening on Greece, our correspondent says.

While the official view is still that Greece must be saved, he says there is more and more talk on the margins that a Greek default would not be a disaster.

'Painful measures'

The plan agreed by the Greek government includes 15,000 public-sector job cuts, liberalisation of labour laws, lowering the minimum wage by 22% and negotiating a debt write-off with banks.

But a key demand of the EU, IMF and European Central Bank was reform of the pension system, an issue that proved to be a stumbling block.

Prime Minister Lucas Papademos tried to convince his coalition partners to overhaul pensions and save 300m euros a year.

Talks broke up without an agreement, but officials later announced that a compromise had been reached. It was not clear how the 300m euro saving would be made.

The government needs the backing of the eurozone ministers and the approval of the Greek parliament before the deal can be finalised.

Neither Mr Juncker nor Mr Schaeuble detailed their doubts about the plan, but IMF officials had earlier hinted that it lacked any proposals for major institutional reform.

They were also seeking assurances that the agreed measures would not be affected by elections due in April.

Greece is already feeling the effects of an earlier round of austerity, put in place as part of a deal to release funds from a previous bailout.

Those cuts triggered widespread unrest and violent protests.

Greece is deep in recession with unemployment rising above 20%.

Unions have already said they will go out on strike over the latest austerity plans, condemning them as "painful measures" that would create misery.

Meanwhile, US President Barack Obama reaffirmed America's willingness to help stabilise the eurozone.