The Greek prime minister, George Papandreou, today called the
country's austerity programme a matter of national survival as
negotiations with the EU and IMF over a potential €120bn (£100bn) rescue package entered their final stage.
a week in which pressure from the financial markets threatened to
destroy the Greek economy and the single currency, the socialist leader
insisted that new cost-cutting measures aimed at trimming the budget
deficit by 10% by 2013 were essential to avert collapse for the
It is expected that details of the rescue, which involves €45bn in loans this year and could reach as much as €120bn, will be announced after eurozone finance ministers meet in Brussels on Sunday.
the top priority is the survival of the nation. This is the red line,"
Papandreou told parliament. "The economic measures that we have to take
are necessary for the protection of our country, our future, for us to
be able to stand on our feet," he said, resisting calls from opposition
parties to reject the rigorous reforms which will include opening up
"closed shop" professions to improve competitiveness.
measures expected in the IMF's three-year austerity programme are the
end to collective bargaining – bound to cause opposition from Greek
unions – a two percentage point rise on VAT and the scrapping of public
sector bonuses amounting to two months' extra pay.
have pledged to turn traditional May Day celebrations into raucous
protests. A general strike – the third this year – has also been called
for next Wednesday. "We want to help the country exit the crisis but if
the government continues with these policies that hurt workers only, we
have no other choice but to oppose them with all our might," said Ilias
Iliopoulos, head of the civil servants' union.The measures could be
outlined by Papandreou as early as tonight.
Three rounds of
previous hard-hitting spending cuts, announced in the six months since
the socialists assumed office, have failed to calm markets. Greece's
debt-to-GDP ratio is 120% with predictions it could hit 145% without
international aid. By 19 May, Athens has to refinance €8.5bn in
Although most Greeks understand the severity of
the crisis, and appear willing to accept some belt-tightening, the
latest measures are widely seen as a step too far. Echoing the public's
growing anger, Alexis Tsipras who heads the radical Left party, lashed
out at Papandreou. He said the reforms would unleash untold misery on
Greece. "These measures will bring disaster to this country," he told
parliament. "Not since the second world war has Greece seen anything as
For more insight, read Mark Weisbrot's latest piece.