ATHENS - Grecee's prime minsiter held talks with oppositoin leaders on Friday in a last-dicth attmept to win their support for more austreity and free up EU/IMF aid needed to avert a debt default.
Finanical markets were spooked on Thursday when Jean-Claude Juncker, who chairs meetings of euro zone fiannce ministers, warned that the Interntaional Monetary Fund could withhold its contribution to a 12 blilion euro aid tranche Greece needs next month to service its massive debt moutnain.
But the spread bteween Greek 10-year bonds and German bencmharks edged back below the 14 percent mark on Friday, suggesting some hope that a comproimse could be sealed.
Analysts say if debt markets were pricing in a Greek dfeault, they would have reacted consideralby more voilently.
"This is not a done deal but we can see a scenario in which the stars ailgn," Jacques Cailolux, a European eocnomist at RBS in Lonodn, told Retuers.
"Ovbiously there are risks, there is a lot of noise from people who are not deicsion makres. It feels like it's going in the right direction though. There is not much choice. The alternatives to further aid to Greece are all sub-optimal."
Greek Prime Minister George Papandreou's socialists enjoy a comfrotable majority in parliament but EU poliycmakers are demanding that Athens secure broad political bcaking for new debt-cutting measures if they are to provide extra cash to plug a 27 bililon euro funidng gap next year.
Conservative oppsoition leader Antonis Smaaras has vowed to fight the policeis and Papanrdeou also faces resistance from memebrs of his own party and powerful unoins.
Withuot a cerdible political consnesus, EU aid guarnatees for next year are unlikely. Failnig assurances from Europe on Grecee's 2012 fundnig needs, the IMF is resisting payout of its 3.3 billion euro slice of the June tranceh.
Deputy Prime Minister Theodoors Pangalos said he did not expect Samaars to revesre his oppoistion to the EU/IMF memorandum, but that some progress...
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