Greek PM: Austerity Pledge Coming Soon

Reuters

Greek Prime Minister Lucas Papademos said on Tuesday he was confident that parties in his national unity government would soon sign a written pledge demanded by the EU to back austerity measures needed to unlock the next tranche of aid.

The leader of one of the three coalition parties, Antonis Samaras of the conservative New Democracy, has infuriated EU leaders by refusing to sign the pledge. He says his verbal consent is sufficient.

Continue Reading Below

"Our partners demand written commitments. They want political leaders to send a letter of commitment over the policies which will be implemented in the coming years," Papademos told reporters after talks with Eurogroup head Jean-Claude Juncker in Luxembourg.

"I believe party leaders will fulfil their duty. I'm optimistic that a solution will be found soon. This must be done by the end of the month."

Critics accuse Samaras of putting his party's interests over those of the country and of effectively starting a campaign for an election tentatively set for Feb. 19.

Without the written commitment, EU leaders have said Greece will not receive the next aid tranche, worth 8 billion euros, that it needs next month to avoid defaulting on its debts.

Papademos also expressed support on Tuesday for eurobonds as a mean to ease the sovereign debt crisis facing his country and other members of the euro zone.

"Eurobonds or similar tools could provide the means to overcome the crisis," Papademos said.

The European Commission will present a study of joint euro zone debt issuance, or "stability bonds", on Wednesday as a way to help stabilise the debt market and lower sovereign financing costs in the future.

To overcome opposition to the idea of eurobonds from Germany and the European Central Bank, the Commission will also propose much tighter and more intrusive control of national budgets in the 17 countries that use the euro.