Economy | 30.04.

2010

Continued public opposition hampers Greek

economic reforms
The Greek government's austerity measures required to
secure eurozone monetary aid are still unpopular
amongst the public. The proposed cuts triggered
protests and strikes across the country, with more in
the pipeline.

Greece's economic woes are fuelling civil

unrest

Trade unions in Greece on Friday were preparing further strikes opposing government spending cuts
designed to help the country control its runaway debts. Police and protesters clashed outside the
finance ministry in Athens on Thursday evening.

Officers fired tear gas to disperse hundreds of protesters - many of whom work in the public sector.
Teachers stopped work and radio technicians launched a 48-hour strike, halting news broadcasts.

Greek union officials said the International Monetary Fund asked Athens to raise sales taxes, scrap
bonuses in the public sector, and accept a three-year pay freeze.

"The immediate emergency measures will be a strong bridge to cross over to great changes, secure
the life of every citizen, and provide dynamic growth in a more just society," Greek Prime Minister
George Papandreou said on Thursday, trying to garner public support for the severe austerity
measures.

The government in Athens needs international aid in the coming days to avoid defaulting on a May
19 deadline to repay nine billion euros ($12 billion) in maturing debts. But to get this money, it must
satisfy the international community that it's making the changes necessary to eventually repay these
fresh loans. Meanwhile, its cash-strapped populace is questioning whether spending cuts will
stimulate growth in the country.

German doubts persist

Parts of Germany's opposition Social Democrat party are still

skeptical about an international rescue for Greece, and the former
SPD leader Kurt Beck is threatening to try and veto the law in the
upper house of Germany's parliament, the Bundesrat.

"The condition for acceptance is that the draft law is not just a dry
approval of a loan, but also contains lasting, concrete measures,"
German politicians are still reticent to loan Beck, the state premier of Rheinland Palatinate, told the
money to Greece Rheinischer Post newspaper.

These measures should include "banks playing their part, and a containment of currency speculation,"
Beck said.

Beck's position goes against the grain of most of the opposition in Germany, who have largely agreed
to support the Greek rescue. However, the government needs near unanimous consent in order to
push the legislation through quickly as an emergency measure.

The SPD's parliamentary leader, Frank-Walter Steinmeier, believes German politicians have no
choice but to support the measures.

"Now we have to act," Steinmeier said. "The German government has already waited too long."
Steinmeier also said the Greek problems showed that monetary union can only function properly
when coupled to unified eurozone policies on taxation, the economy and financial issues.

In defense of the euro, not of Greece

The German government is promising to be strict with Greece,

setting tough conditions for any financial aid, but it also says
Athens must receive loans that could total up to 120 billion euros
over three years.

"We have to go down this route," German Finance Minister

Wolfgang Schaeuble said on public television. "We are not
Wolfgang Schaeuble has hinted a deal defending Greece, we are defending the stability of our currency."
could be done by Sunday
As well as rushing to secure domestic approval of the Greek
rescue, the German government is also trying to help shape the international agreement; Wolfgang
Schaeuble suggested that Sunday might be the pivotal day for these talks.

Meanwhile, EU Commission President Jose Manuel Barroso has said he is confident a deal will be
reached, and that it will help prevent other eurozone countries from falling into similar debt
problems.

"There is no doubt that Greece's needs will be met in time," Barroso told reporters in Beijing. "I am
confident that the talks will be concluded very soon, meaning [the] next days."

msh/Reuters/AFP/dpa
Editor: Rob Turner