EURO zone finance ministers had dropped plans for a special face-to-face meeting yesterday on Greece’s new international bailout, saying political party chiefs in Greece had failed to provide the required commitment to reform.

A day before euro zone finance ministers had been due to meet in Brussels to consider the bailout, the man most likely to be Greece’s next prime minister had yet to sign a commitment to implement the austerity measures demanded by the EU and International Monetary Fund (IMF).

Likewise, the cabinet had yet to fill a 325-million-euro (US$427 million) gap in the budget cuts promised for this year, even though the ministers of the Eurogroup had told Athens they needed a complete package of promises and signed undertakings.

With the EU’s patience with Greece close to breaking point, Eurogroup chairman Jean-Claude Juncker downgraded talks to a telephone conference call yesterday until this morning.

That appeared to kill any chance that the Eurogroup would approve the 130 billion euro bailout, funds from which Greece must start getting by next month to avoid a messy bankruptcy. It is due to hold a regular meeting Feb. 20.

Juncker said he was awaiting written undertakings from Greek party leaders on pushing through with the austerity package of pay, pension and job cuts, which parliament passed Monday as rioters wrecked buildings across central Athens.

A source familiar with the bailout negotiations said conservative leader Antonis Samaras had yet to sign the commitment to implement the deeply unpopular austerity package, a condition set by the EU and IMF lenders who are weary of broken Greek promises on economic reform and budget cuts.

This practice of keeping everyone in suspense until the last minute appears to have cost Greece the full Eurogroup meeting. Time is running out as it faces a chaotic default if it cannot meet 14.5 billion euros in debt repayments due March 20.

With New Democracy well ahead in opinion polls, Samaras is frontrunner to become the next prime minister. When parliament debated the austerity package, he indicated he would try to renegotiate the terms of the bailout, further sowing doubt in the minds of European leaders.

A source at the PASOK socialist party, the other coalition party, said its leader George Papandreou had already provided a signed undertaking.

Greece’s Cabinet negotiated late on solving the other hitch with Brussels, the 325-million-euro hole in the 3.3 billion euros of extra budget cuts which the government has promised for this year.

All this was played out as Greece’s downward economic spiral accelerated. Data showed that the economy shrank 7 percent in the fourth quarter of last year, even more than the five percent contraction of the third quarter.

Greece is now in its fifth year of recession and is well on its way to suffering one of the biggest slumps of modern history. GDP has contracted 16 percent from its peak and the austerity will only make that worse.

(SD-Agencies)