Debt inspectors back in Greece, protests swell

AP News
Posted: Sep 29, 2011 2:46 PM
Debt inspectors back in Greece, protests swell

As international debt inspectors returned to Greece on Thursday, the government promised to fast-track deeper public-sector pay cuts and protesting civil servants occupied the Finance Ministry and other government buildings.

Officials from the International Monetary Fund, European Central Bank and European Commission _ known as the troika _ will determine whether to recommend debt-struck Greece receives the vital next installment of bailout loans.

They had halted their review earlier this month, frustrated at missed fiscal targets and delays in implementing austerity reforms.

An initial meeting with Finance Minister Evangelos Venizelos was "positive and constructive," a ministry official said on condition of anonymity in keeping with ministry rules.

Venizelos welcomed a key vote by German lawmakers Thursday to bolster a European rescue fund, arguing that its passage was helped by the fact that "Greece has sent a very clear and decisive message at an international level that it meets its obligations."

The minister promised to submit legislation to the Greek parliament next week, reducing public sector pay scales and scrapping numerous bonuses _ the latest cost-cutting measure to prompt anger from unions.

Hundreds of civil servants took over several government ministries early Thursday morning, including the finance, interior, justice, health, environment and regional development ones. Most of the occupations ended later in the day.

"The occupations are being carried out today when the troika returns to our country and in the face of the barbaric new measures which have been decided and are being decided," the civil servants' union ADEDY said in a statement.

Civil servants and taxi drivers, angry at new licensing rules, staged peaceful protest rallies in central Athens, and in the northern city of Thessaloniki scuffles broke out between riot police and students protesting education reform.

Greece has been reliant since May 2010 on regular payouts of loans from a euro110 billion ($150 billion) bailout from other eurozone countries and the IMF. It was granted a second euro109 billion package in July, but details of that deal remain to be worked out.

The troika had originally been expected to approve Greece's next batch of loans, worth euro8 billion, in early September. Greece has said that without the loans, it has enough funds to see it through mid-October, after which it will be unable to pay salaries and pensions.

The government recently announced a series of additional austerity measures, including pension cuts, extra taxes and the suspension of 30,000 civil servants on partial pay by the end of the year.

Prime Minister George Papandreou stressed during a Cabinet meeting to discuss the situation that the new measures were essential, and that Greece would honor the commitments it had made.

"The reform of Greece will not come from abroad, it will come from us ourselves," Papandreou told his ministers, according to statements released by his office. "From all of us, from the government and the people, from a broad _ if silent _ majority, from an alliance that these great changes require."

Papandreou, who will meet with French President Nicolas Sarkozy in Paris Friday, said that during his recent visit to Berlin to meet with German Chancellor Angela Merkel he discussed the possibility of cooperating with Germany on issues such as administration and tax systems.


Derek Gatopoulos in Athens and Costas Kantouris in Thessaloniki contributed.