Greece to press on with austerity measures

GREEK Prime Minister George Papandreou said he would press ahead with new austerity measures after failing to win backing from the main opposition parties as he races to keep bailout funds flowing and avoid default.

Antonis Samaras, leader of Greece’s biggest opposition party, New Democracy, rejected the plan at a meeting with Mr Papandreou and other opposition leaders in Athens, saying his party wouldn’t be blackmailed. Mr Papandreou said he will go ahead with the measures even while continuing to seek support and ruled out early elections.

“My determination is to continue with this programme in a very determined and decisive way,” Mr Papandreou said yesterday at a press conference in Athens. Greece has achieved “impressive” targets and there are signs of improvement in the economy, he said, adding that the country will “soon be out of the woods” by following through with plans for fiscal adjustment, state asset sales and development of government-owned real estate.

European Union officials have called for consensus on the package, which includes an additional €6 billion of budget cuts and a plan to speed €50bn of state-asset sales, before approving more aid that Greece needs to avoid default. The wage cuts and tax increases Mr Papandreou has imposed under a €110bn bailout last year have prompted strikes and protests, complicating efforts for compromise on the new plan.

Mr Papandreou had said the country needed to show unity, decisiveness and seriousness as possible. “It’s not the time for conventional opposition politics” or “glib talk.” Mr Papandreou said he will continue to seek a political consensus.

EU Economic and Monetary Affairs Commissioner Olli Rehn said it was “essential for all parties to support the EU-International Monetary Fund programme”.

“We expect that the efforts toward a cross-party agreement” will continue, he said in an e-mailed statement from Brussels. “An agreement has to be found soon. Time is running out.”

After the talks broke up Greece’s yield on the country’s 10-year bond rose four basis points to 16.42%, more than twice the level at the time of the bailout.

One year after the rescue, which aimed to stem the spread of the region’s debt crisis, Greece remains shut out of financial markets.

EU leaders are considering new loans and a voluntary extension of bond repayments for Greece to close a funding gap in 2012 of about €30bn.

The EU and the IMF had demanded that Mr Papandreou adopt the additional budget measures before approving the next aid installment and considering additional funds for next year.