الرئيسية
By JUERGEN BAETZ and NICHOLAS PAPHITIS, AP
ATHENS, Greece (AP) — In an abrupt U-turn, Greece's
conservative junior coalition leader has written to international
creditors telling them he backed the country's fiscal targets, clearing a
major sticking point to get a desperately needed loan that will prevent
a devastating Greek bankruptcy.
In a letter Wednesday to the
heads of the European Union and the International Monetary Fund, Antonis
Samaras said his conservative New Democracy party also supports many of
the austerity measures the debt-wracked country has already
implemented.
The letter was made public hours after German
Chancellor Angela Merkel issued a blunt warning that rescue loans would
remain frozen until Greece's fiscal targets received cross-party
backing.
While naming public expenditure cutting, fighting tax
evasion, structural reforms, and privatizations among the measures he
backs, Samaras made no mention of tax hikes to bolster flagging state
revenues, which he has vocally opposed in the past — advocating tax cuts
instead.
"On the evidence of the budget execution so far, we
believe that certain policies have to be modified," Samaras wrote. "We
intend to bring these issues to discussion, along with viable policy
alternatives."
Heading for a fourth year of deep recession and
with unemployment at a record high, Greece has implemented repeated
pension and wage cuts — coupled with heavy tax increases and a rise in
retirement ages — to cut bloated budget deficits. The deeply resented
austerity measures have triggered a series of violent protests over the
past two years, with the country's two biggest labor unions calling a
new general strike for next week.
Greece's international
creditors have insisted that Samaras, along with other party leaders
supporting the country's new interim coalition government, must commit
in writing to backing the country's new €130 billion ($174 billion)
bailout plan approved last month.
Otherwise, the vital next €8
billion ($10.71 billion) loan installment — from the €110 billion
bailout agreed on in May 2010 — will not be released.
German Chancellor Merkel spelled that out again earlier Wednesday.
"The
Greek question is still unresolved because we do not yet have the
preconditions to pay out the next installment," Merkel told Parliament
in Berlin.
Greece's second international bailout includes
provisions for banks and other private holders of Greek bonds to write
off 50 percent of their Greek debt holdings, potentially cutting the
country's debt by €100 billion ($134 billion).
Without the next
loan installment, Greece would go bankrupt before Christmas and could
eventually be kicked out of the 17-member eurozone, reverting to a
devalued version of its pre-2002 drachma currency.
The country's
central bank governor dramatically highlighted the quandary, saying
Wednesday that the Oct. 26 new bailout deal was "a last chance" for
Greece to keep using the euro.
Presenting the bank's interim
monetary policy report, George Provopoulos urged the government to clean
up its act and avoid new deviations from fiscal revival policies.
"We
must quicken our pace, not only to reach our targets but to surpass
them," he said. "Because what's at stake now is very large: whether we
remain in the euro. So I think most Greeks have no question when it
comes to this type of dilemma. We must succeed."
The report said
Greece has so far failed to persuade markets and ordinary citizens that
it can make its cost-cutting and reform targets.
"The situation
remains critical," the report said. "Economic policy has often been
conducted in a piecemeal manner, indecisively, with backtracking and
delays, and following rather than leading developments."
It added
that the government is focused on "indiscriminate and across-the-board
approaches ... to curtail public spending, while the mechanisms that are
inherently cost-generating remain untouched; this outcome prevails
because the public administration is unable to work out targeted
solutions, which would be more effective and socially more equitable."
The
report said the economy is expected to shrink by 5.5 percent or more in
2011, before slowing to 2.8 percent next year and reverting to modest
growth in 2013.
Greek Prime Minister Lucas Papademos' new
government was appointed earlier this month after political turmoil led
to the resignation of Socialist Prime Minister George Papandreou.
Papademos is a former central banker and deputy head of the European
Central Bank. The technocratic government is expected to lead Greece
until early elections in February.
___
Juergen Baetz reported from Berlin. Derek Gatopoulos in Athens contributed.
ATHENS, Greece (AP) — In an abrupt U-turn, Greece's
conservative junior coalition leader has written to international
creditors telling them he backed the country's fiscal targets, clearing a
major sticking point to get a desperately needed loan that will prevent
a devastating Greek bankruptcy.
In a letter Wednesday to the
heads of the European Union and the International Monetary Fund, Antonis
Samaras said his conservative New Democracy party also supports many of
the austerity measures the debt-wracked country has already
implemented.
The letter was made public hours after German
Chancellor Angela Merkel issued a blunt warning that rescue loans would
remain frozen until Greece's fiscal targets received cross-party
backing.
While naming public expenditure cutting, fighting tax
evasion, structural reforms, and privatizations among the measures he
backs, Samaras made no mention of tax hikes to bolster flagging state
revenues, which he has vocally opposed in the past — advocating tax cuts
instead.
"On the evidence of the budget execution so far, we
believe that certain policies have to be modified," Samaras wrote. "We
intend to bring these issues to discussion, along with viable policy
alternatives."
Heading for a fourth year of deep recession and
with unemployment at a record high, Greece has implemented repeated
pension and wage cuts — coupled with heavy tax increases and a rise in
retirement ages — to cut bloated budget deficits. The deeply resented
austerity measures have triggered a series of violent protests over the
past two years, with the country's two biggest labor unions calling a
new general strike for next week.
Greece's international
creditors have insisted that Samaras, along with other party leaders
supporting the country's new interim coalition government, must commit
in writing to backing the country's new €130 billion ($174 billion)
bailout plan approved last month.
Otherwise, the vital next €8
billion ($10.71 billion) loan installment — from the €110 billion
bailout agreed on in May 2010 — will not be released.
German Chancellor Merkel spelled that out again earlier Wednesday.
"The
Greek question is still unresolved because we do not yet have the
preconditions to pay out the next installment," Merkel told Parliament
in Berlin.
Greece's second international bailout includes
provisions for banks and other private holders of Greek bonds to write
off 50 percent of their Greek debt holdings, potentially cutting the
country's debt by €100 billion ($134 billion).
Without the next
loan installment, Greece would go bankrupt before Christmas and could
eventually be kicked out of the 17-member eurozone, reverting to a
devalued version of its pre-2002 drachma currency.
The country's
central bank governor dramatically highlighted the quandary, saying
Wednesday that the Oct. 26 new bailout deal was "a last chance" for
Greece to keep using the euro.
Presenting the bank's interim
monetary policy report, George Provopoulos urged the government to clean
up its act and avoid new deviations from fiscal revival policies.
"We
must quicken our pace, not only to reach our targets but to surpass
them," he said. "Because what's at stake now is very large: whether we
remain in the euro. So I think most Greeks have no question when it
comes to this type of dilemma. We must succeed."
The report said
Greece has so far failed to persuade markets and ordinary citizens that
it can make its cost-cutting and reform targets.
"The situation
remains critical," the report said. "Economic policy has often been
conducted in a piecemeal manner, indecisively, with backtracking and
delays, and following rather than leading developments."
It added
that the government is focused on "indiscriminate and across-the-board
approaches ... to curtail public spending, while the mechanisms that are
inherently cost-generating remain untouched; this outcome prevails
because the public administration is unable to work out targeted
solutions, which would be more effective and socially more equitable."
The
report said the economy is expected to shrink by 5.5 percent or more in
2011, before slowing to 2.8 percent next year and reverting to modest
growth in 2013.
Greek Prime Minister Lucas Papademos' new
government was appointed earlier this month after political turmoil led
to the resignation of Socialist Prime Minister George Papandreou.
Papademos is a former central banker and deputy head of the European
Central Bank. The technocratic government is expected to lead Greece
until early elections in February.
___
Juergen Baetz reported from Berlin. Derek Gatopoulos in Athens contributed.