Greek PM defends bailout deal ahead of vote
Athens needs debt-relief deal before March 20 deadline
On the eve of a crucial vote to qualify for a massive bailout, Greek leaders urged lawmakers to pass more painful spending cuts or face a "catastrophe" that would leave residents subsisting on food stamps and the country wallowing in bankruptcy.
In a televised address Prime Minister Lucas Papademos defended the austerity measures, which would earn the country a €130-billion ($171.6-billion) bailout deal and stave off bankruptcy.
Papademos and the other party leaders backing Greece's coalition government — socialist George Papandreou and conservative Antonis Samaras, as well as socialist Finance Minister Evangelos Venizelos — used stark images of a country under bankruptcy to convince the public and members of Parliament to support the austerity measures.
"The deal will ensure our country's future inside the euro," Papademos said. "A bankruptcy would lead to uncontrollable economic chaos and social explosion."
He added that a bankruptcy would lead to Greeks losing their savings, the state being unable to pay salaries and pensions, and shortages in import items such as medicines, fuel and machinery.
Several dissident lawmakers were unconvinced. At least 13 conservative deputies and seven socialists declared they would not vote and two more socialist deputies resigned, bringing the total to three. Their replacements will be seated Sunday.
The austerity measures in the bailout deal, including the layoffs of 15,000 workers and a 22 per cent drop in the minimum wage and pension cuts, have set off street protests and led to the resignations of half a dozen Cabinet officials.
Bond repayment woes
Debt-stricken Greece does not have the money to cover a €14.5 billion bond ($19.1 billion) repayment on March 20, and must reach a vital debt-relief deal with private bond investors before then. The country's woes have threatened its future in the 17-country zone that uses the euro currency.
The European Union is waiting to see Greece finally act on their commitments.
"If the right course is now set sustainably in Athens, Greece can count on our support — but only then," German Foreign Minister Guido Westerwelle was quoted as telling the weekly Der Spiegel.
"There can no longer be advance payments," he said, according to the report. "Only actions count now."
Westerwelle said that the "clear aim" is to keep Greece in the eurozone. But he insisted that "it is not enough to approve reform programs; it is necessary to begin the implementation of the reforms without delay. Not sometime, but now."
The demands of creditors, including the European Union and the International Monetary Fund, have caused one of the original coalition parties in Greece — the populist right-wing Popular Orthodox Party — to quit the government and withdraw its four members from the cabinet.
Two more cabinet members, both socialist deputy ministers, have also quit. They cited their disagreements with parts of the austerity package.