Greece's coalition parties must tell the European Union on Monday whether they accept the painful terms of a new bailout deal as EU patience wears thin with political dithering in Athens over implementing reforms.
Technocrat Prime Minister Lucas Papademos put on a brave face as he tried to get leaders of the three parties in his government on Sunday to sign off on the terms of a 130 billion euro rescue, which Greece needs soon to avoid a chaotic debt default.
Papademos said in a statement the party chiefs - who may face angry voters in parliamentary polls as soon as April - had agreed measures including wage cuts and other reforms as part of spending cuts worth 1.5% of gross domestic product.
But a spokesman for the PASOK socialist party said a number of major issues demanded by the "Troika", representing Greece's EU, European Central Bank and IMF lenders, remained unresolved.
Talks on the new bailout, which would be Greece's second since 2010 - and an accompanying deal to ease the country's huge debt burden via its private creditors accepting deep losses on the bonds they hold - have dragged on for weeks, stretching the EU's patience to breaking point.
"Things are very tough and difficult," a Greek government official said, requesting anonymity.
Now the parties - PASOK, the conservative New Democracy and far-right LAOS - must respond to a working group of senior euro zone finance ministry officials who are preparing for a meeting of their ministers later in the week.
"The political leaders must give their response in principle by noon tomorrow, so that it can be taken to the Euro Working Group in Brussels," said PASOK spokesman Panos Beglitis.
Big issues
Beglitis made clear the leaders of the three parties still had much to negotiate as the noon (1000 GMT) deadline for a response nears.
The most contentious remaining issues are labour reforms demanded by Greece's lenders and how to shore up domestic banks, which are up to their necks in Greek government bonds now worth a fraction of their face value.
"There are two big issues left - labour and banks ... those have been left for tomorrow," he said.
By late on Sunday, no meeting of the Euro Working Group had been formally scheduled for Monday but it could confer either by conference call or schedule a face-to-face meeting at short notice, depending on the outcome of talks in Athens.
Greeks have been worn down by a deep recession, now in its fifth year, and wave after wave of austerity measures imposed under the first international bailout in 2010.
Alarmed by the prospect of yet more budget cuts, Greece's two main trade unions said they would call a 24-hour strike for Tuesday in protest against policies which they say have only driven the economy into a downward spiral.
"Despite our sacrifices and despite admitting that the policy mix is wrong, they still ask for more austerity," Ilias Iliopoulos, secretary general of public sector union ADEDY, told Reuters.
ADEDY and its private sector sister union GSEE, which will join Tuesday's strike, represent about 2 million workers or roughly half the country's workforce.
Knife edge
With Greece facing 14.5 billion euros of debt repayments in March, a bill it cannot meet without further bailout funds, the stakes could not be higher.
Greek officials have emerged increasingly despondent after each round of talks, complaining that the European Central Bank, European Commission and International Monetary Fund troika was stubbornly refusing to yield on demands to cut the minimum wage level, axe holiday bonuses and fire public sector workers.
New Democracy and the far-right LAOS party in particular have staunchly opposed further wage and spending cuts, arguing they risk pushing Greece into an even deeper recession and imposing more pain on struggling Greeks.
Papademos, a former central banker, said progress had been made during Sunday's five hours of negotiations with New Democracy chief Antonis Samaras, PASOK head George Papandreou and LAOS leader George Karatzaferis.
The budget cuts worth 1.5% of GDP this year appeared to be more than the troika wanted initially although with the Greek economy on a downward trajectory that is a moving target.
Greece's lenders, initially demanded spending cuts worth about 1% of GDP - or just above 2 billion euros - this year, and insist all political leaders endorse the cuts irrespective of the outcome of the elections.
Papademos said the measures to cut wages and non-labour costs aimed to make the Greek economy more competitive, but he gave few details.
The slow progress in Athens has angered Greece's European partners. Euro zone officials say finance ministers told Greece on Saturday it could not go ahead with an agreed deal to restructure privately held debt until it guaranteed it would implement reforms.
"There is a great sense of frustration that they are dragging their feet," one euro zone official said.
