Saturday, June 25, 2011

Athens struggles to win backing for austerity plan - Business - Mail & Guardian Online

Greece's government faces an electorate vehemently opposed to austerity measures which must be passed in Parliament next week to avert default, but progress is being made in persuading banks to take part in a second bailout.

An opinion poll on Friday put Greece's conservative opposition -- which is refusing to support the plan -- 2.1 points ahead of Prime Minister George Papandreou's PASOK party and showed three quarters of Greeks were opposed to the raft of tax hikes and spending cuts that will hit them hard.

European Union leaders meeting in Brussels promised more money to help Greece stave off looming bankruptcy, provided its Parliament enacts the debt-cutting plan, finalised in fraught last-minute talks with international lenders.

"We have agreed that there will be a new programme for Greece on which the Greek Parliament will have to vote next week," German Chancellor Angela Merkel told reporters at an EU summit in Brussels.

If Parliament does not pass the measures, the EU and International Monetary Fund have said they will not release a vital €12-billion funding tranche and Athens will run out of cash within days.

Papandreou, who won a confidence vote this week with 155 votes in the 300-strong Parliament, has ditched his former finance minister and appointed party rival Evangelos Venizelos to sell the five-year plan to his party and a sceptical public.

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