International

Greek PM says any future govt must back EU/IMF bailout

ATHENS: Greek Prime Minister George Papandreou offered Wednesday to step down and make way for a national unity government provided it supported EU/IMF bailout plans, government sources said.

But a source in the conservative New Democracy party said the conservatives would only take part in a new unity government if it renegotiated the bailout and Papandreou resigned.

“We told the prime minister … that we would accept a government of wider cooperation on two conditions: That Papandreou is not the prime minister, and that its target will be the renegotiation of the terms of the (EU/IMF) memorandum and the midterm fiscal plan,” the New Democracy source said.

Earlier in the day, angry youths hurled petrol bombs at the Finance Ministry and tens of thousands of protesters marched on parliament to oppose government efforts to pass new austerity laws for the debt-choked eurozone state.

Unions representing half the 5-million-strong workforce also launched a nationwide strike, shutting government offices, ports, schools and reducing hospitals to skeleton staff.

Papandreou must push through a new five-year campaign of tax rises, spending cuts and sell-offs of state property to continue receiving aid from the European Union and International Monetary Fund and avoid default.

He not only faces public protests and resistance from a conservative opposition that has surpassed his Socialist party in opinion polls, but a few backbenchers in his own parliamentary grouping are also threatening to reject the plan.

One PASOK deputy defected on Tuesday, reducing the party’s strength in parliament to 155 seats out of 300. Another said he would oppose the bill, making an apparently guaranteed result less certain. Most analysts still expect the bill to pass.

Thousands of activists and unionists converged on the central Syntagma square on the parliament’s front steps to try to stop lawmakers from entering to debate the bill in committee that they hope to pass by the end of the month.

Stun grenades boomed around the square and plumes of smoke rose from burning garbage bins as police fired tear gas and fought running skirmishes with scores of youths who fought back with rocks and long clubs, Reuters witnesses reported.

“We want them out. Obviously these measures are not going to get us out of the crisis,” Antony Vatselas, a 28-year-old mechanical engineer, crying from tear gas. “They want only us to pay for it. And they are doing nothing. I want the debt to be erased. If this doesn’t happen, there is no exit for Greece.”

One group hurled petrol bombs and clashed with police at buildings housing the Finance Ministry, also on the square. Reuters witnesses saw flames in front of an entrance to the main building and a similar clash a few buildings down.

The vast majority of the diverse crowd – which included union workers, political party members, pensioners, and a wide array of Greeks upset at the new austerity measures – only shouted at the parliament building and remained peaceful.

Police said seven protesters and two officers were slightly wounded and they had detained 40 people.

They said the crowd numbered around 30,000 but they often underestimate numbers.

The new austerity package foresees 6.5 billion euros ($9.4 billion) in tax rises and spending cuts this year, doubling measures agreed with bailout lenders that have pushed unemployment to a record 16.2 percent and extended a deep recession into its third year.

The plan includes new luxury taxes, a crackdown on tax evasion and tax rises on soft drinks, swimming pools, restaurant bills and real estate. The eurozone member’s 750,000-strong public work force would be cut by a fifth.

With those and other measures worth total savings of 28 billion euros through 2015, it also aims to raise 50 billion euros by selling off state-owned firms.

Political analysts said the strong public outcry had raised pressure on ruling party deputies. Failure to push through the measures would put Greece in default and had the potential to shock global markets, they said.

 
A version of this article appeared in the print edition of The Daily Star on June 16, 2011, on page 5.

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