Asia Stocks Fall As Greek Debt Talks Drag On

PAN PYLAS

LONDON (AP) — Stocks were trading lower on Tuesday as talks dragged on in Greece to agree the terms of a second bailout — and avoid looming bankruptcy — despite intense pressure from the country's euro partners.

With much of Greece coming to a standstill due to a general strike called against impending cutbacks, markets will be monitoring political leaders' talks in Athens. Heads of the three parties backing the interim government will try to thrash out a deal on new austerity measures needed to get vital bailout cash.

They will confer with Prime Minister Lucas Papademos on new income cuts and job losses, which Greece's eurozone partners and the International Monetary Fund are demanding to keep the country's rescue loans flowing. With a general election scheduled to take place within a few months, political leaders are fretting about the impact on their fortunes of signing up to a deal that imposes more hardship on Greece's population.

"No one in Greece wants to be seen to be tightening the austerity noose even tighter for fear of being punished at the polls," said Michael Hewson, markets analyst at CMC Markets.

Athens must placate its creditors to clinch a €130 billion ($170 billion) bailout deal from the eurozone and the IMF and avoid a March default on its bond repayments.

Without an injection of emergency money, Greece will likely default on its bond repayments on March 20 — an event that could shake European banks and other private lenders with Greek debt on their books.

President Nicolas Sarkozy of France and German Chancellor Angela Merkel have warned Greek leaders that they need to push through the austerity measures or risk letting the country go bankrupt.

Even though another round of deadlines have passed, the prevailing mood in the markets is that Greece will get a debt-reduction deal with its private creditors as well as the second bailout.