ATHENS – As Prime Minister George Papandreou’s PASOK Socialist Members of Parliament unanimously supported an emergency property tax as part of crushing new austerity measures ordered by international lenders in return for money to keep Greece from going bankrupt, he was in Berlin Sept. 27 meeting Chancellor Angela Merkel who said her country would offer “all necessary assistance.”
Germany is footing much of the cost of a $152 billion bailout being put up by the Troika of the European Union-International Monetary Fund-European Central Bank, even as Merkel is trying to convince sceptics in Germany to keep supporting Greece. The Parliament vote came amid heated protest, a possible sign of more social unrest.
The German leader said she also wants to keep the 17-member Eurozone of countries using the euro as a currency from unraveling because of the Greek crisis. “Through the euro, we are closely bound together, and the weakness of one affects us all,” Merkel said at a news conference with Papandreou as international markets watched closely. “We want a strong Greece,” she said.
As Athens was paralyzed with a transportation strike and union leaders planned massive nationwide strikes for Oct. 5 and Oct. 19 to protest deep new cuts in salaries, big tax hikes that will hurt workers and the poor the most while tax evaders remain largely untouched, slashed pensions and the layoffs of 30,000 workers with hundreds of thousands more on the chopping block, Papandreou came to Merkel with his hand out, hoping she can propel the Troika into approving an $11 billion loan installment early in October, without which Greece will go broke and be unable to pay its workers or pensioners.
Greek Finance Minister Evangelos Venizelos said Greece will get the money although Troika inspectors have not said yet when they will return to Athens to see if the country is complying with its orders. “The disbursement will be decided in time, in line with the course of our funding needs,” he said.
Under pressure to also speed the pace of privatizing state-run entities and sell or lease state-owned properties to raise $71 billion, Papandreou pledged to implement the reforms and said that despite a mountain of analytical evidence that Greece will have a deficit for a decade or more that, “We hope that we can manage a primary budget surplus already in 2012.” Speaking through a translator, he said: “Those are times of great sacrifices for the Greek people. Therefore it is of great importance to receive signals of support from our European partners.” Earlier the same day he told a meeting of German business leaders that, “We are borrowing to repay.” Papandreou spoke to members of the German Industrialists Federation (BDI) and pleaded for Greece to be given more time to carry out reforms.
“If people feel only punishment and scorn, the crisis will not become an opportunity, it will become a lost cause,” he said, adding that the constant criticism of Greece was not only “frustrating at a political level, where a superhuman effort is being made to meet stringent targets in a deepening recession, but frustrating for the Greeks who are making these painful sacrifices and difficult changes.”
At the same time he said it would take several years to make the reforms demanded and asked for patience, but the federation’s leader, Hans-Peter Keitel said in an interview that his members aren’t buying it. “No foreign investor will invest money in Greece when Greek investors are quitting the country,” he said. There has been growing speculation in the markets that Greece’s bailout creditors will look to impose bigger losses on Greece’s private bondholders as well as recapitalize Europe’s banks and boost the size of the Eurozone’s rescue fund. Banks have agreed to take a 21 percent hit but that could be as much as 50 percent or more, reports said.
The austerity measures are fueling rising public anger, especially as Greeks said they don’t believe the country’s rich elite is sharing the pain and escaping payment and workers complain that the country’s politicians and powerful are making them pay for the mistakes of the leaders. The new measures, besides the property tax that is being put into electric bills under the threat of power cuts for non-payment, include an unprecedented tax on Greece’s poor, those making only $6,790 a year, although it will be $12,900 for those under 30 or over 65.
(Sources: AP, Kathimerini. Foto: Reuter’s)
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