Eurozone crisis: Greek plea for political support of new bailout

By EDDIE BARNES
Published on Sunday 12 February 2012 00:00

THE leaders of Greece’s coalition government last night called on their colleagues to back legislation for more harsh austerity measures to allow the embattled country to get a new ¤130 billion (£108 billion) bailout and stave off bankruptcy and departure from the Eurozone.

Both leaders – socialist George Papandreou and conservative Antonis Samaras – told their respective parliamentary groups there is no real alternative to voting for the legislation today, or Greece would be left without a banking system, and without the cash to buy fuel, food and medicine from abroad.

Police and government authorities are now bracing themselves for a repeat of the violence seen on the streets in Athens on Friday when 7,000 protesters had to be disbursed with tear gas after throwing petrol bombs during a 48-hour protest strike against further austerity measures.

A decision to back the bailout will lock the new government into a further ¤3.3bn package of cuts, with the EU and the IMF demanding that Athens begin correcting the balance of its hopelessly indebted public finances. The package involves wage and pension cuts and the sacking of thousands of civil servants. In return, there is to be a fresh bailout and a debt-swapping deal with private creditors

With prime minister Lucas Papademos expected to address Greeks directly today, his senior ministers spelled out the consequences of not pressing ahead with the austerity measures. Failure to do so will leave Greece with little choice but to accept a disorderly default and a departure from the Eurozone, analysts say. “The consequences of disorderly default would be incalculable for the country – not just for the economy. It will lead us on to an unknown, dangerous path,” said deputy finance minister Filippos Sachinidis.

Failure to meet debt repayments of ¤14.5bn due on 20 March would leave the country with no cash to pay for foreign goods, he added. “Let’s just ask ourselves what it would mean for the country to lose its banking system, to be cut off from imports of raw materials, pharmaceuticals, fuel, basic foodstuffs and technology.”

Conservative Samaras and finance minister Evangelos Venizelos, a socialist, used stark images of a country under bankruptcy to warn their parliamentary groups of the importance of their vote. Samaras told a dissenting deputy: “What do you want, a country where food will be handed out with food stamps and where we will have no fuel?”

Venizelos told socialist lawmakers: “The battle is now. The war is now. If we falter, nothing will be left standing. The real dilemma is between painful measures and crushingly painful ones.”

Former prime minister Papandreou said: “If we do not dare today, we will live a catastrophe. He acknowledged the huge pressure on any politician backing the second rescue. “I’ve lost friends, my family suffered, I gave up my office, I was insulted, vilified, like no other politician ever was in this country,” he told PASOK’s parliamentary group. “Still, all that is nothing compared with what our people will suffer if we fail to do the right thing. Despite all the anger we are feeling inside, we must persevere.”

By the weekend, Papademos had already been forced to accept the resignation of six members of his cabinet over the cuts. But with the coalition government in place he has a huge majority which should ensure the deal goes through.

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samcoldstream

Sunday, February 12, 2012 at 12:26 PM

Conservative Eurosceptics everywhere will be praying for the default of Greece. CofE churches will be packed to the brim with Tory MPs! .

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harlequin

Sunday, February 12, 2012 at 10:32 AM

The eurozone members should band together a tell the Germans to leave the Euro,Germany is the main problem with its massive surplus,and its total lack of compromise ,it is the only country that benefits from the Euro as it stands today,either the Germans make severe compromises or they should leave. [due to their massive trade surplus this would cause few problems.

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