Greek edges towards bailout deal

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Media captionMark Lowen: "This country must make painful reforms."

Pressure is rising on Greece's national unity government to agree tough reforms demanded by the country's lenders.

Greek party leaders once more postponed plans to meet on Tuesday and approve terms of a new bailout.

This comes as the European Commission's Neelie Kroes told a Dutch newspaper that there would be "absolutely no man overboard" if Greece left the euro.

But Prime Minister Lucas Papademos' office told the BBC that a draft agreement has been finalised.

A formal sign-off on the reforms demanded by international lenders - including a 20% cut to the minimum wage, pension cuts and civil service job cuts - is hoped to be concluded on Wednesday, the BBC's Athens correspondent Mark Lowen said.

Meanwhile, Dutch Prime Minister Mark Rutte also told public radio that a Greek exit from the eurozone now would be less risky than if it had happened in 2010 when its debt crisis first broke.

"There is less risk now," Mr Rutte said. "It is in our interest that Greece remain [in the eurozone] and to achieve that it must do all it has promised to do but if that does not work out, then we are stronger now than a year and a half ago."

But German Chancellor Angela Merkel said on Tuesday there would be "unforeseeable consequences" if Greece left the euro.

"I will have no part in forcing Greece out of the euro," she said.

Meanwhile, public transport and the country's ports ground to a halt as two of the largest Greek public sector unions began a strike on Tuesday in protest at spending cuts, tax rises and job losses.

Police had to use tear gas to prevent some protesters on Syntagma Square from breaking a cordon around the parliament building.

'Tough' negotiations

The government held meetings with EU, International Monetary Fund and European Central Bank delegates on Monday.

Finance Minister Evangelos Venizelos said the negotiations were "so tough that as soon as one chapter closes another opens".

At the same time, as part of Greece's new 130bn euro ($170bn; £110bn) bailout deal, private sector lenders are negotiating with Greece to write off up to 70% of the value of the money that the Greek government currently owes them.

The leader of the left-wing Syriza party coalition, which is not part of the interim government, repeated a call on Tuesday either for Greece's debts to be written off, or else for the country to pause its debt repayments for three years.

"The debt is not sustainable," Alexis Tsipras told Greek television channel SKAI.

"With the [debt restructuring], most of the [bailout] money will go to the banks and to the bondholders."

The Greek trade unions called for an end to the policies promoted by the government and the so-called "troika".

In a petition delivered to parliament, the unions expressed "opposition to measures included in the new memorandum which, aside from the dramatic impact on workers, it is also a confession of the dead-end economic policy followed and its adverse consequences on real economy".

'Good will'

Outside Greece, European leaders turned up the pressure.

"What's a man overboard?" Mrs Kroes told the Dutch newspaper Volkskrant. "It's always said that if you let one country get out, or ask it to get out, then the whole structure collapses. But that's simply not true.

"The Greeks have to realise that we Dutch and we Germans can only sell emergency Greek aid to our taxpayers if there's evidence of good will."

A similar message was delivered with a more optimistic spin by Jean-Claude Juncker, chairman of the "eurogroup" of eurozone finance ministers, who said he had no doubt that Greece would remain within the eurozone, provided that it met its obligations to other members.

"The euro will outlive us all," he said.

On Monday, Greece agreed to pass a new law allowing more government employees to be fired - it is likely to lead to 15,000 civil service jobs being cut.

They are also likely to agree to a 20% cut in the minimum wage, BBC correspondents in Athens say.

The Greek economy is expected to suffer a fifth consecutive year of recession this year, and has already shrunk 12% since 2008.

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