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Papandreou urges vote to ‘keep Greece on its feet’

By Agence France-Presse
Tuesday, June 28, 2011 8:34 EDT
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Prime Minister George Papandreou begged the Greek parliament Monday to pass drastic austerity measures and keep the bankruptcy-threatened country “on its feet”, as protesters launch a 48-hour general strike.

Facing “empty coffers” within days, Papandreou used a 15-minute intervention during an emergency debate to try and keep intact his slim, five-seat majority ahead of votes on Wednesday and Thursday aimed at unlocking 12 billion euros ($17 billion) of funds from the EU and IMF.

Papandreou said lawmakers doing their “patriotic duty” would “bring to an end a period of uncertainty” for Greece, and argued that his new budgetary plan would give Greece “a fresh start towards a productive economy.”

He wants to slice 28.6 billion euros from the balance of government spending by 2015, and raise what international partners hope can reach 50 billion in privatisation receipts.

The EU and IMF have demanded the cuts and sell-offs in order provide the latest tranche of funding under last year’s 110-billion-euro bailout package.

Approval of the austerity measures by lawmakers would also allow work to proceed on a second bailout of a similar size.

Eurozone finance ministers are to meet on Sunday amid intensified negotiations with private creditors that French President Nicolas Sarkozy says could see banks’ exposure to Greek debts extended for 30 years.

Amadeu Altafaj, spokesman for EU economic affairs commissioner Olli Rhen, said negotiations with banks and other private creditors would continue over “the coming two weeks.”

Papandreou also held telephone talks with Luxembourg Prime Minister Jean-Claude Juncker on Monday, a Greek official said, and will press the EU in the coming days to unblock grants from the EU budget due to Athens for routine projects.

Under global pressure to avoid a debt default that could wreak havoc across the 17-nation eurozone and beyond, Finance Minister Evangelos Venizelos urged MPs to show a “serious and united” face “so that the state’s coffers are not found empty at the start of July.”

“It is a necessary evil,” added Efstathios Koutmeridis of the governing Socialists, as the country braced itself for another round of strikes on Tuesday that will halt planes, trains and ships at the start of the lucrative island tourist season.

Already on Monday, Greek airlines Olympic Air and Aegean cancelled dozens of mainly internal flights, and rescheduled a series of international departures.

The party repelled a move to raise the majority threshold for the austerity votes from 151 to 180, with the premier closing with a plea for the European Union to “give Greece the time to pay back its debts.”

Opposition to the measures is strong, particularly among taxpayers who will lose the equivalent of one monthly wage per year.

Former liberal Greek finance minister Stefanos Manos told AFP the austerity plan is little more than a “public hold-up, which will force people into lying to survive”, meaning even more tax avoidance.

The latest austerity measures “will only make the situation worse,” said Yanis Varouthakis, an economics professor in Athens.

BNP Paribas economist Thibault Mercier meanwhile warned of “a vicious circle of recession,” underlining: “The root question of Greece’s solvency remains open.”

One Socialist lawmaker has threatened to vote against the measures, but one conservative opposition MP has pledged to support the government.

European officials have long said there are no other options for Greece than to accept the austerity measures, but it emerged on Monday that contingency plans were being made in case Greek lawmakers reject the measures.

A senior European Union official said Brussels is working on a “Plan B” in case the Greek parliament fails to approve the austerity measures — stressing that Greece cannot just be allowed to declare itself bankrupt.

Agence France-Presse
Agence France-Presse
AFP journalists cover wars, conflicts, politics, science, health, the environment, technology, fashion, entertainment, the offbeat, sports and a whole lot more in text, photographs, video, graphics and online.
 
 
 
 
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