(Edited from AP, Athens) Prime Minister George Papandreou called on Greeks to brace for more painful spending cuts to deal with an unprecedented financial crisis, saying their sacrifices were essential to national survival.

 

In a dramatic speech Tuesday to his Socialist party’s deputies in Parliament, Papandreou said time was running out to pull the country out of the crisis. He also announced the further spending cuts – include more tax hikes and deeper reductions in civil servants’ pay.

(Edited from AP, Athens) Prime Minister George Papandreou called on Greeks to brace for more painful spending cuts to deal with an unprecedented financial crisis, saying their sacrifices were essential to national survival.

 

In a dramatic speech Tuesday to his Socialist party’s deputies in Parliament, Papandreou said time was running out to pull the country out of the crisis. He also announced the further spending cuts – include more tax hikes and deeper reductions in civil servants’ pay.

 

The cuts are aimed at reducing the deficit, winning firm backing from the European Union and convincing bond investors that Greece is creditworthy so they will keep lending.

 

“We would have liked to have had more time for the results of our big structural reforms to become apparent. … But this time simply doesn’t exist today,” Papandreou said. “Our creditors, on whom we unfortunately depend, won’t give it to us.”

 

The speech came a day after the EU’s finance chief, Olli Rehn, told Athens it must impose more painful, permanent spending cuts soon if it is to emerge from the crisis, which has undermined the 16-country euro.

 

He stressed that his country faced catastrophic consequences if it could not borrow on more reasonable terms. The crisis has made the cost of Greek borrowing rise as international markets show concern over whether Athens can pay back its debts.

 

Greece saw its credibility plummet after Papandreou’s newly elected government in October sharply revised the deficit put out by the previous government to a staggering 12.7 percent of annual economic output – over four times the EU limit and up from an initial estimate of under 4 percent of GDP.

 

Greeks will fight “to save Greece, its citizens and our children from whatever the nightmare scenario of bankruptcy could be,” he said, adding that “we are today in a state of war in front of negative scenarios for our country.”

 

LEAVE A REPLY

Please enter your comment!
Please enter your name here