Greek politicians cave in to Diktat

Greek bailout deal reached, but euro finance ministers cautious

From Guardian Live-update

7.47pm:In Athens tonight, the squabbling has started again between rival political parties – just hours after they appeared to put their differences aside and back the tough austerity measures demanded in return for its second bailout, worth €130bn.

Politicians have been engaged in an unseeemly rush to distance themselves from the deal. As we flagged up at 4.17pm, a deputy minister swiftly quit.

This was followed by the resignation of a senior member of the conservative New Democracy party. Yiannis Manolis claimed the deal would condemn Greeks to "Bulgarian salaries in a country with Brussels prices."

Aleka Papariga, the communist party leader, had already fired up the rhetoric, claiming that international lenders were determined to force the Greek people into "concentration camp conditions."

The junior party in the coalition is even claiming that it is not part of the agreement. As Helena Smith explains from Athens:

If there was any sense that the brinkmanship on display in the last few weeks is over, it was put to rest last night when Laos, the junior party in the ruling coalition said it had not even been informed about the bailout agreement.

As such, it had played no role in resolving the issue of cuts in supplementary pensions, the final obstacle to consensus being reached over the accord.

"We've had no contact all day with the prime minister's office," said Nikos Vasilliades a party spokesman. "The deal only represents the two main parties, Pasok and New Democracy."

7.29pm: My colleague Ian Traynor reports from Brussels that euro finance ministers are piling pressure on Greece to prove it will deliver on its pledges to slash public spending.

Without solid assurances, Greece may still not get its new €130bn bailout – despite its political leaders finally agreeing to the terms of the rescue package today.

Ian writes:

Following weeks of brinkmanship that have poisoned relations between the bankrupt country and its eurozone creditors, the ministers and senior officials from the Eurogroup, the European Central Bank, the European Commission, and the International Monetary Fund are wrangling over whether to activate the bailout to prevent outright Greek insolvency by the end of March when the country has to redeem more than 14 billion euros in debt.

Despite the announcements in Athens and Frankfurt that Greece's coalition government had yielded to savage new terms from the eurozone to qualify for the bailout, it is unclear whether the highly complex new rescue package would be finalised at the meeting in Brussels.

The emphasis, though, is on first getting Greece to deliver its side of the bargain.

7.01pm: The word from Brussels is that there's no chance of EU finance ministers ruling tonight whether Greece's agreement is acceptable.

A press conference is expected to be held at 11pm local time, 

or 10pm GMT.

Many of the pictures coming out of the meeting show finance ministers looking somewhat stressed -- Evangelos Venizelos, for example, appears to be feeling the strain...

That follows the comments from EU finance ministers, questioning whether the deal agreed by Greek coalition leaders actually meets Europe and the IMF's demands.

As reported at 4.22pm, Germany's Wolfgang Schäuble has fuelled fears that Greece may still not have done enough. He told reporters that:

The agreement, as far as I understand, is not at a stage where it can be signed off.

If you're coming to this story late -- the key points are that 

a) overnight, Greek leaders failed to agree to €300m of pension spending cuts, but accepted other austerity measures demanded by its Troika of lenders

b) At 3pm today, Lucas Papademos announced that a deal had been reached over this missing €300m. However the statement, which you can see here, is rather short of detail.