Greece to unveil new austerity cuts for bailout package
Monday, 3 May 2010
ATHENS, May 2 (AFP): The Greek government prepared to launch today a fresh round of unpopular austerity cuts in order to secure loans desperately needed from the EU and IMF to regain control of a spiraling debt crisis.
At the start of a cabinet meeting at 9:30 am (0630 GMT), Prime Minister George Papandreou was to reveal details of what Greeks would have to sacrifice for the bailout package, sources said.
The deal could be worth as much as 120 million euros (160 billion dollars).
The government, the European Union and the International Monetary Fund wrapped up negotiations on Saturday as 15,000 people swarmed through the streets of Athens in May Day protests against the austerity drive.
Anti-riot police fired tear gas at youths to contain clashes on the margins of the marches which Greek union leaders wanted to be a prelude to what they hope will be a crippling nationwide general strike on Wednesday.
After the deal with the EU and IMF is announced in Athens, the 16 eurozone finance ministers will meet in Brussels at 4:00 pm (1400 GMT) on Sunday to give their stamp of approval to the unprecedented package.
According to French Finance Minister Christine Lagarde, the rescue loans could run from 100 to 120 billion euros over three years, which economists say should allow Greece to avert default on its debts.
Two thirds of the package will come from the European partners; the rest from the International Monetary Fund.
Following months of hesitation, eurozone countries decided to accelerate rescue efforts for Greece out of fear its debt crisis could pull down other members with severely strained public finances such as Portugal or even Spain.
Union officials have already reported that the IMF and the EU has told Greece to slice off by next year 10 percentage points from a public deficit that reached 13.6 percent of output in 2009.
After Greece's credit rating was cut last week to junk status, the interest rates the country has to borrow at shot through to record levels with the 10- year bond yield at one point going past 11 percent before falling back.
With nine billion euros in debts coming due on May 19, the government had few choices but to turn to the EU and IMF for help: it was either that or default on part of its vast mountain of debt and run the risk becoming a global economic pariah.
At the start of a cabinet meeting at 9:30 am (0630 GMT), Prime Minister George Papandreou was to reveal details of what Greeks would have to sacrifice for the bailout package, sources said.
The deal could be worth as much as 120 million euros (160 billion dollars).
The government, the European Union and the International Monetary Fund wrapped up negotiations on Saturday as 15,000 people swarmed through the streets of Athens in May Day protests against the austerity drive.
Anti-riot police fired tear gas at youths to contain clashes on the margins of the marches which Greek union leaders wanted to be a prelude to what they hope will be a crippling nationwide general strike on Wednesday.
After the deal with the EU and IMF is announced in Athens, the 16 eurozone finance ministers will meet in Brussels at 4:00 pm (1400 GMT) on Sunday to give their stamp of approval to the unprecedented package.
According to French Finance Minister Christine Lagarde, the rescue loans could run from 100 to 120 billion euros over three years, which economists say should allow Greece to avert default on its debts.
Two thirds of the package will come from the European partners; the rest from the International Monetary Fund.
Following months of hesitation, eurozone countries decided to accelerate rescue efforts for Greece out of fear its debt crisis could pull down other members with severely strained public finances such as Portugal or even Spain.
Union officials have already reported that the IMF and the EU has told Greece to slice off by next year 10 percentage points from a public deficit that reached 13.6 percent of output in 2009.
After Greece's credit rating was cut last week to junk status, the interest rates the country has to borrow at shot through to record levels with the 10- year bond yield at one point going past 11 percent before falling back.
With nine billion euros in debts coming due on May 19, the government had few choices but to turn to the EU and IMF for help: it was either that or default on part of its vast mountain of debt and run the risk becoming a global economic pariah.