GREECE’S PRIME minister, George Papandreou, has implored parliament to back his new government as euro zone finance ministers prepared to seek agreement among themselves on the structure of a new €120 billion bailout for the beleaguered country.
Mr Papandreou appealed for cross-party support to tackle Greece’s financial crisis, warning that the country “will quickly run out of funds” if it is unable to draw down a €12 billion loan tranche as expected next month.
He spoke as supporters of the “Indignant Citizens” movement encamped outside the parliament building were gathering to protest against a fresh austerity package agreed with the EU and the IMF in return for another loan.
“The country finds itself at a critical crossroads . . . so I am seeking a national consensus to address the problems of the debt and the budget deficit,” Mr Papandreou said.
He added: “Our problems won’t be solved by sending away the IMF or our European partners,” as anti-austerity protesters have demanded.
Analysts said parliament – where Mr Papandreou’s socialist party holds a six-seat majority – was expected to approve the new government in a vote of confidence tomorrow.
The socialists face a more difficult test at a second parliamentary vote due on June 28th to approve the medium-term austerity package, and allow the next tranche of the current EU-IMF loan to be disbursed.
Antonis Samaras, conservative opposition leader, rejected the prime minister’s request for consensus, saying the government should renegotiate the austerity package with the EU and IMF.
Mr Samaras told parliament: “The policy mix in the first package didn’t work . . . we asked the government to change the mix but it hid behind the insistence of the EU and IMF.”
He added: “But what they’re asking now still won’t work.”
The four-year package of tax increases, public sector job cuts and privatisations aims at creating a primary budget surplus and raising €50 billion in revenues to reduce public debt.
An opinion poll in the To Vimanewspaper yesterday showed that 47.5 per cent of Greek voters believed the medium-term package should be rejected by parliament and a general election held. Mr Papandreou on Friday unveiled a new cabinet dominated by tough personalities, including Evangelos Venizelos, a former political rival, as finance minister, after talks on forming a national unity government broke down. – Copyright The Financial Times Limited 2011