Greeks wary of government austerity plan

Greece's austerity plan to overcome a financial crisis may have won European Commission blessing.

Greeks wary of government austerity plan

Greece's austerity plan to overcome a financial crisis may have won European Commission blessing, but on the street of Athens few are cheering the prospect of years of belt-tightening.

"I feel they will take money from the poor again," said Giannis Hatzithanos, a 55-year old civil servant.

"Politicians have brought the country to this point. I'm afraid they will use our money to throw parties, while our wages will be frozen," he said.

The European Union executive approved on Wednesday a 3-year programme presented by the Socialist government including a public sector wage feeeze, tax hikes and welfare spending cuts to slash a spiralling budget deficit. Shortly after the EU verdict, which briefly boosted Greek bonds and bank shares, the country's biggest labour union GSEE called a one-day strike for Feb. 24.

"I deeply regret that the government has succumbed to the will of the markets," the union's president, Yannis Panagopoulos, said in a statement.

The main ADEDY public sector union had already told workers to stay home on Feb. 10 in protest at the plan, which its leader has called ineffective and disproportionate.

 

BITTER MEDICINE Under pressure from Brussels and rating agencies to fix its finances, Prime Minister George Papandreou went on television on the eve of the EU verdict to unveil even more draconian measures -- extending the public sector wage freeze to those earning less than 2,000 euros a month, and raising a tax on fuel.

In a country with a history of violent street protests, Papandreou -- who came to power last October on a pledge to tax the rich and help the poor -- must strike a balance between the EU demands and the risk of sparking social unrest at home.

"People can't be happy with measures that hurt. But they knew they were coming, so the political cost for now is limited," said Costas Panagopoulos, head of pollster ALCO.

"If these measures fail, however, the cost in terms of protests and social upheaval will be huge," he said.

Political commentators say the government must act quickly while it still enjoys solid popular support. Most Greeks are willing to make some sacrifices as long as they perceive the burden of pain to be spread evenly and see those responsible for widespread corruption punished.

"We will accept the measures, although I don't believe they will help, they won't get us out of the crisis," said Ifigeneia Vasilopoulou, 55, a housewife enjoying the sun in an Athens park.

"If the prime minister wants to be just, he has to give back the money politicians have wasted, from all those scandals, billions and billions of euros."

Greece lived beyond its means under successive governments, running up a huge public debt which this year is expected to top 120 percent of its gross domestic product.

With the economy entering its first recession in 16 years in 2009 and expected to shrink further this year, the country cannot rely on growth -- at least in the short term -- to help it shore up its finances. Analysts warn the measures already announced may not even be enough to put it back on its feet.

"What I tell my 25-year-old son is to leave and stay abroad, there is nothing for him here," said Vasilopoulou.

Reuters

Last Mod: 03 Şubat 2010, 23:22
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