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Greece on 'Knife Edge' to Agree on Bailout


European Commission President Jose Manuel Barroso, left, speaks with Greek Prime Minister Lucas Papademos during a round table meeting at an EU summit in Brussels, January 30, 2012.

European Commission President Jose Manuel Barroso, left, speaks with Greek Prime Minister Lucas Papademos during a round table meeting at an EU summit in Brussels, January 30, 2012.

Greek Prime Minister Lucas Papademos continues emergency talks with Greek party leaders Monday on more spending cuts, with his finance minister warning that the country is "on a knife edge" (brink of disaster).

The government and parliament must agree on a new austerity plan if it is to get another crucial bailout from the European Union and International Monetary Fund.

A day of talks between Greek officials and EU and IMF debt inspectors ended Sunday with no breakthroughs.

The IMF and EU are demanding Greece make more spending cuts and economic reforms before they agree to another $169-billion rescue package. This would include more pay cuts for Greek workers.

Conservative New Democracy Party leader Antonis Samaras is urging the government to reject the demands, saying the country cannot bear any more austerity measures.

Greece is also negotiating with private lenders and bondholders on a plan to swap old bonds for new ones at a considerably lower interest rate, saving Greece $130 billion in debt. The country faces default when the old bonds come due next month.

Some information for this report was provided by AP, AFP and Reuters.

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