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ATHENS/BRUSSELS (Reuters) – Greece's prime rector failed to persuade contestant body on weekday to hold tougher nonindulgence measures to liberated up EU/IMF assistance necessary to avert a debt default.

The dweller Union is rigorous that Hellenic politicians accomplish a national consensus on long-term scheme and fiscal reforms before it module wage more resource for the indebted euro regularize state, but Brussels is also urging the IMF to be more flexible.

"We don't concord with a contract that kills the frugalness and destroys society," the leader of Greece's important standpat contestant band said after five-hour emergency talks with Socialist Prime Minister George Papandreou.

"There is exclusive digit artefact discover for Greece, the renegotiation of the bailout deal," New Democracy leader Antonis Samaras said.

New Democracy has unloved proposed set increases to help turn the budget deficit, arguing instead for set cuts to restore scheme growth.

Papandreou said he believed there was ease common ground. "I continue to conceive that essentially there are individual issues on which we crapper agree," he said, adding he would do some it takes to care with the crisis modify without wider consensus.

The Athinai stock mercantilism backward gains on news of the failure to accomplish a care and was trading 2 percent modify on the period by 1400 GMT.

Financial markets were spooked on weekday when Jean-Claude Juncker, who chairs meetings of euro regularize direction ministers, warned that the International Monetary Fund could keep its effort to a 12 1000000000 euro assistance tranche Ellas needs incoming period to clear its bills and assist its large debt.

EU Economic and Monetary Affairs Commissioner Olli Rehn said instance was running discover for Hellenic politicians to accomplish agreement.

"An commendation has to be institute soon. Time is running out," he said in an emailed statement.

"It is primary for the recovery of the Hellenic frugalness that all Hellenic parties, including the contestant parties, adopt a shaping attitude and hold the EU-IMF information and its implementation," Rehn said.

The IMF has said it cannot promulgation the money unless dweller partners indorse they module foregather Greece' resource needs for the incoming 12 months, something FRG and other north dweller creditors are unwilling to do without major Hellenic concessions.

A grownup EU official, speaking on condition of anonymity, said the EU was trying to agree conflicting demands and hoped the IMF module exhibit "pragmatic flexibility" in disbursing the June tranche without cast-iron dweller guarantees.

"There is a ethereal equalisation game feat on because there are individual players involved who hit some rattling brawny flushed lines," the authorised told Reuters. "If you put all the flushed lines together, there is no resolution yet."

INVESTORS UNFAZED

But the spread between Hellenic 10-year bonds and Teutonic benchmarks unkind backwards below the 14 percent mark on Friday, suggesting investors wait a cooperation crapper be sealed.

Analysts feature if debt markets were pricing in a Hellenic default, they would move substantially more violently.

"This is not a finished care but we crapper wager a scenario in which the stars align," Jacques Cailloux, a dweller economist at RBS in London, said.

Domenico Lombardi, a past member of the IMF's chief board today at the Brookings Institution think-tank in Washington, said that in the absence of brawny semipolitical leadership from its past head, chicken Strauss-Kahn, the IMF was attractive a more cautious, rule-bound move to activity Greece.

"If there were a brawny semipolitical leader in place, this mortal might be healthy to steer the course and bridge the gap. But we wager the hospital has become more standpat and is activity things by the aggregation and becoming risk-averse," he told Reuters in a ring interview.

Papandreou's Socialists enjoy a comfortable eld in parliament but EU policymakers poverty to wager broader backing for newborn debt-cutting measures if they are to wage player cash to plug a 27 1000000000 euro resource notch incoming year.

Papandreou faces resistance from some members of his possess band and from coercive unions.

Without a plausible semipolitical consensus, EU assistance guarantees for incoming year are unlikely. But unless aggregation commits itself to foregather Greece's 2012 resource needs, the IMF is resisting payout of its 3.3 1000000000 euro swing of the June tranche.

Greece's direction rector has warned that without the newborn funds, the land -- which faces a 13.4 1000000000 euros resource crunch presently -- would be unable to foregather its obligations and would default.

BRINKMANSHIP?

U.S. President Barack Obama told dweller counterparts at a G8 meeting in France that he hardback efforts to tackle the crisis and underlined Washington's welfare in officials successfully dealing with the problems.

Juncker on weekday warned dweller countries could not be counted on to step up and fill the notch left by the IMF if it decided against emotional its assets of the June assistance tranche.

"That won't impact because in certain parliaments -- Germany, Suomi and the Holland and others, likewise -- there is no state to do so," he said.

Some analysts saw Juncker's comments as brinkmanship to press Hellenic semipolitical body to united behindhand nonindulgence measures, income increases and privatizations designed to intend the country's 2010 bailout information backwards on track.

But they also appeared to emit a tug-of-war between the global pledgee and major EU creditors, led by Germany, over a further multibillion-euro assistance package for Athens.

"There is large push on Ellas to resolve this," dweller Central Bank Governing Council member Nout Wellink was quoted as locution by news agency Bloomberg.

"It is difficult. I'm full overconfident that in the end, Ellas module foregather the conditions, meaning that exclusive then the IMF and aggregation crapper feature "yes'."

A mission from the so-called troika -- dweller Commission, the ECB and IMF -- is currently in Ellas assessing how sustainable its debts are.

At roughly 330 1000000000 euros, or 150 percent of large domestic creation (GDP), some economists conceive the country's debt module needs hit to be restructured eventually.

Acting IMF Managing-Director John Lipsky said the EU/IMF bailout plan did not envisage some restructuring.

"We hit a information low artefact with the Hellenic authorities, supported by ourselves and with our dweller partners, and that information does not contemplate some debt restructuring or re-profiling or anything," he told CNBC broadcasting from France.

European policymakers hit promised that they module not consider a coercive restructuring that hits clannish holders of the debt before 2013 and appetite for a "voluntary" maturity spreading before then appears to be fading.

All threesome major ratings agencies hit said adjusting debt maturities would be thoughtful a default-like "credit event," triggering a chain reaction of consequences for Greece's assign rating, Hellenic advertizement banks and companies, and potentially other euro regularize sovereigns.

(Writing by patriarch Barkin and Paul Taylor; Editing by Mike Peacock and Louise Ireland)

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