After three days of delays, Greek coalition leaders were locked in crucial debt talks Wednesday with the prime minister to review a draft deal on steep cutbacks demanded by creditors in return for a €130 billion ($172 billion Cdn) bailout.

A meeting of eurozone finance ministers will go ahead in Brussels on Thursday evening to discuss the second massive bailout for Greece — a key indication that a deal is close. Jean-Claude Juncker, who heads the finance minister meetings and is Luxembourg's premier, said the officials will meet at noon ET.

In Athens, leaders of three parties backing the 3-month-old coalition are under intense pressure to accept the new austerity demands and shield the country from a looming bankruptcy. However, as the talks with Prime Minister Lucas Papademos entered their seventh straight hour, there was still no sign that the politicians had reached a consensus on where the cuts should fall.

The leaders met at the prime minister's office after their parties were handed a 50-page, English-language draft agreement, drawn up with international debt inspectors late Tuesday.

Athens has already accepted a demand to fire up to 15,000 workers in the public sector in 2012, but is under pressure to impose deeper cuts, including reductions in pension payments and the minimum wage. Two years of cutbacks already have seen unemployment rise to around 19 per cent and poverty to 20 per cent in Greece, according to data from the EU statistics agency Eurostat.

Papademos called Juncker on Wednesday to relay the reservations of Greek political parties regarding proposed pension cuts, a party official said on condition of anonymity because the talks are ongoing.

Greece's largest labor union, GSEE, said it would meet Thursday to consider calling for new protests against the austerity measures. "They simply don't care that they are causing such damage to the country and such damage to society," said senior GSEE official Stathis Anestis.

Anger mounts

A disorderly bankruptcy by Greece would likely lead to its exit from the eurozone, a situation that European officials have insisted is impossible because it would hurt other weak countries like Portugal, Ireland and Italy.

It was still not clear whether the parties — the majority Socialists, main rival conservatives, and small right-wing LAOS — would accept the austerity demands, particularly ahead of national elections provisionally set for late April.

"Austerity measures are like shoes that are too tight. Sooner or later, you want to kick them off," LAOS leader George Karatzaferis was quoted as saying by state TV.

The coalition talks have been repeatedly postponed this week to make time for exhaustive negotiations with representatives of the European Union, the European Central Bank and the International Monetary Fund, on whose approval the continued flow of Greece's vital rescue loans depends.

Without the bailout, Greece would not have enough money to pay off a big bond redemption payment due on March. 20, triggering a default that risks sending shockwaves throughout financial markets and the global economy.

As anger mounts in Greece at the prospect of further economic pain, patience is running out abroad.

German Chancellor Angela Merkel's spokesman said Greece must swiftly return to a sustainable, viable path.

Prime Minister Loukas Papademos enters talks Wednesday with Greek coalition leaders to review a draft deal on steep cutbacks demanded by creditors in return for a €130 billion bailout. (Yiorgos Karahalis-pool/Associated Press)

"This is not a question one can take a lot of time to tackle," Steffen Seibert said. "It is important that the negotiations now come to an end."

Late Tuesday, Greece's private creditors signaled progress on a separate, linked agreement that would cut the country's privately held debt load by 50 per cent, or some euro100 billion ($132 billion).

The intention is to ensure that Greece's long-term debts are sustainable. Banks, pension and hedge funds and other private sector holders of Greek debt are expected to swap their current bonds for new ones worth 50 per cent less than the original face value, with longer repayment terms and a lower interest rate.

They are also expected to get a €30 billion payment as part of the bond swap deal.

"We face crucial decisions ... that will determine the country's course in coming years," Deputy Finance Minister Philippos Sachinidis told Parliament. "These days are among the most crucial of our post-World War II history."

The EU, ECB and IMF, known collectively as the "troika", have demanded the additional measures which they say will improve Greece's competitiveness and economic stability, as well as cuts in health, welfare and defense spending.

Labor Minister Giorgos Koutroumanis warned Parliament last week that a demanded reduction in the €751 ($991) minimum monthly wage would quicken the Greek economy's contraction and hit the revenues of struggling pension funds that have already lost €20 billion ($26 billion) since 2009.

But Athens has minimal ground for maneuver. Without the rescue loans, the country will default on its massive debts in March, when it faces a €14.5 billion ($19 billion) bond redemption.

Greece has been kept solvent since May 2010 by payments from a €110 billion ($145 billion) international rescue loan package. When it became clear the money would not be enough, a second bailout was decided last October.

Stocks advanced Wednesday, while the euro was trading near two-month highs, as global markets were hopeful a deal would be struck in Athens. Greek shares closed 0.9 per cent higher.

'We are finally approaching the endgame of the Greek talks.'—Gary Jenkins, Swordfish Research

"We are finally approaching the endgame of the Greek talks," said Gary Jenkins, managing director at Swordfish Research.

"Ultimately it is difficult to see how they can do anything other than agree a deal. After all, the alternative is a disorderly default which could lead to a much deeper economic depression and potential civil unrest."

Provided political leaders accept the demanded austerity, Greek officials say a cabinet meeting will approve the deal, likely later Wednesday. Parliament will then have to vote on the agreement over the weekend.

Ratification should prove simple provided all three coalition partners back the deal, as they control a combined 252 of Parliament's 300 seats — enough to carry the vote even if there is a limited backbencher rebellion.

Coalition parties remain at odds over when to call a general election — initially planned for this month when the coalition was formed — as they face an increasingly hostile public suffering from a fifth year of recession.

The Socialists say Papademos should govern for two more years, while the conservatives want elections in April.

Some 91 percent of Greeks believe the coalition government is taking the country in the "wrong direction," according to a February tracking poll published Wednesday in Greek daily Kathimerini.

Support for the Socialists, who won a landslide election victory in 2009, has dropped to eight per cent, while the neo-Nazi Golden Dawn group has attracted 3 percent support — enough to achieve representation in parliament, according to Public Issue survey.

Conservative New Democracy led with 31 per cent, which is not enough to form a government on its own. Sampling data was not available.