As Greek citizens faced strikes and power cuts, eurozone governments decided to meet again on July 3 to decide on emergency cash and work out the details of a second bailout worth more than 100 billion euros.
|President of the European Council Herman Van Rompuy (R) and Greek Prime Minister George Papandreou (L)|
They did so to allow Prime Minister George Papandreou's government time to win a confidence vote called for Tuesday, and again mobilise a wafer-thin majority on June 28 to steer 28.4 billion euros of austerity cuts ($40.65 billion) into legislation.
European Union leaders also stage a summit in Brussels on Thursday and Friday -- with bailout No. 2 for Greece, whose debts currently top 350 billion euros, near the top of a packed agenda.
Time is running out for Athens as it faces an imminent cash crunch that could see it default on its debt payments by mid-July.
The International Monetary Fund, which is funding a third of Greece's first 110 billion euro bailout, warned decisive action is needed to prevent the crisis from spreading throughout the 17-nation eurozone and beyond.
"Failure to undertake decisive action could rapidly spread the tensions to the core of the euro area and result in large global spillovers," an IMF report said.
Papandreou pledged to push through the austerity package when he met Monday with EU president Herman Van Rompuy and European Commission chief Jose Manuel Barroso in Brussels as part of his pre-summit lobbying.
"We are determined as a country, as a government to be on track with the programme, to move forward to do what is necessary in order to get our country into a fiscally much better and viable position," Papandreou said.
Wrapping up two days of difficult talks on the debt crisis, Luxembourg Prime Minister Jean-Claude Juncker said Greece has no option but to deliver on demands made by its international backers.
"The Greek parliament has to know this has to be done," Juncker underlined, adding that there is no 'Plan B' because there is simply is no alternative available.
Greece's new finance minister Evangelos Venizelos -- who took office after a reshuffle on Friday triggered by the threat of civil unrest -- left his first face-to-face with his eurozone partners without the 12-billion-euro loan installment most had expected him to secure.
Part of last year's 110-billion-euro bailout, ministers delayed approval until Greece enacts the further budget cuts and a 50-billion-euro privatisation programme.
"These choices are not easy, but nor are the problems that need to be addressed," Barroso said after meeting Papandreou. "Now is not the time to falter."
Venizelos admitted that parliamentary backing is "essential," adding that: "Every day has huge value and we cannot afford to lose a single hour."
Greek privatisation receipts are a great unknown, with the programme facing opposition in many quarters and so daunting in size that some suggest a company will need to be sold every 10 days to meet the targets.
When asked if he believed that plan could work Juncker stressed: "They will have to do so."
Eurozone ministers also agreed to raise national guarantees behind a temporary eurozone rescue fund to 780 billion euros between now and the end of 2012, giving an "effective lending capacity" of 440 billion.
They also said that rescue loans from a bigger, post-2013 European Stability Mechanism will now now give preferential treatment to the ESM over other creditors.