Embattled Greek leader calls for support

PRIME Minister George Papandreou, besieged by public protests and dissent in his own party, appealed to Greeks yesterday to support deeply unpopular austerity reforms and avoid a catastrophic bankruptcy.

Papandreou addressed parliament at the start of a confidence debate in his new crisis cabinet, ahead of a eurozone finance ministers’ meeting in Luxembourg that is expected to release a new aid tranche to keep Greece going.

Papandreou said Greece was at a critical crossroads and its cash reserves would soon be exhausted without the €12 billion tranche from the European Union and International Monetary Fund (IMF).

He said: “The consequences of a violent bankruptcy or exit from the euro would be immediately catastrophic for households, the banks, and the country’s credibility.”

Papandreou overhauled his government last week to staunch dissent in the ruling party after the departure of three deputies and public protests threatened a five-year package of tax hikes, privatisations and spending cuts.

New finance minister Evangelos Venizelos headed to Luxembourg last night for a meeting of the eurozone ministers.

The EU/IMF have demanded the plan in exchange for a fresh bailout worth €120bn.

Opposition leader Antonis Samaras called for Papandreou to step down to pave the way for elections and renegotiation of the bailout.

“Why is the government insisting on us supporting the mistake? It does not want consensus but complicity.”

But Papandreou called for the opposition to “stop fighting in these critical times, stop sending the image that the country is being torn apart”. “Showing that we are split is not helping us at all,” he said.

The cabinet hopes to push the reforms through by the end of the month, but weeks of rallies have created political uncertainty and worried investors.

Protesters and unions have vowed to step up demonstrations, which erupted in violence last Wednesday.

Workers at Greek state utility PPC said they would launch a 48-hour strike at midnight last night, which may result in rolling power outages, to oppose plans to sell the company.

Along with a call to sell off state firms to raise €50bn by 2015, the revised austerity plan envisions €6.5bn in budget consolidation for 2011, almost doubling existing measures that have driven unemployment to a record high and extended a recession into its third year.