That second bailout would also see banks and other private bondholders give Greece easier terms on its debt. European banks that hold Greek bonds are fighting efforts to make them accept larger losses, and many experts are concerned about the ability of European banks to handle a Greek default.
But Greece’s international creditors are warning that even the second bailout may not be enough to save the country from bankruptcy, according to a draft of a debt inspectors’ report obtained Thursday by the AP in Berlin.
The inspectors said Greece has missed its deficit-cutting targets and called the pace of its reforms insufficient. They still added that Athens should get the next €8 billion tranche as soon as possible so it does not default.
Papandreou called on Greece’s eurozone partners to urgently end a deadlock in negotiations over a broader European debt deal.
“Europe is now at risk because of its inability to grasp the scale of the crisis in time — the systemic problems — and take the necessary decisions,” he told an emergency Cabinet meeting in Athens. “Europe must now assume its responsibilities — all of us in Europe. A small fire has become a pan-European fire.”
But fury at his government echoed across Athens.
“He (Papandreou) doesn’t know what is going on. For me, it’s the worst government of all time,” said protester Haralambos Tahoulas.
• Demetris Nellas and Elena Becatoros in Athens contributed to this report.