February 11th, 2012
03:54 PM GMT
London (CNN) – Greece is once again at risk of a potentially disastrous default on its bill payments.
The country, which has been embroiled in a debt crisis for almost two years, faces a bill payment of €14.5 billion ($19.1 billion) on March 20. It is in frantic negotiations with both its private sector creditors and international lenders to lighten its debt load and access more funds to pay its bills.
This week marks another crucial point in the battle to bring Greece’s finances under control. As a 48-hour strike called by trade union leaders marks its second day, focus is turning to parliamentary deliberations over the country’s stricken finances.
The Greek government is in the midst of a three day debate on new austerity measures, which it needs to get signed off by midnight Sunday.
The country’s Prime Minister, Lucas Papademos, addressed the nation - which is its fifth year of recession - Saturday evening. He urged the Cabinet to approve the deal, warning of "social explosion, chaos" if it fails.
The measures need to be signed off in order to meet the demands of Greece’s eurozone peers, the International Monetary Fund and the European Central Bank, in return for access to the country’s second bailout, which is worth €130 billion.
A rally is planned outside parliament on Sunday afternoon leading up to the vote.
Next week, Greece will continue its fraught negotiations over a bond exchange offer to private creditors. Greece is hoping to slice around €100 billion - or 50% - off its debt obligations to the creditors as part of its drive to cut bills.
On Wednesday, the Eurogroup - made up of eurozone finance ministers – is expected to meet in Brussels, and will discuss if Greece has done enough to justify getting its bailout.
Last Thursday, Greece was forced back to the drawing board after its plans met with resistance from the group.
At that meeting, Jean-Claude Juncker, the prime minister of Luxembourg and head of the Eurogroup, said Greece's political leaders must make further commitments, including giving a pledge to continue the austerity drive after upcoming elections and finding €325 million in “structural expenditure” cuts for 2012.
This week’s meeting will be under close scrutiny by Europe - and the world - which is waiting to see if Greece can avoid the unknown but likely devastating consequences of a disorderly default.
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