Greek PM calls for unity as EU seeks debt solution

AP News
Posted: Oct 25, 2011 8:43 AM
Greek PM calls for unity as EU seeks debt solution

Prime Minister George Papandreou called for unity across Greece's political spectrum Tuesday, as European officials struggled to come up with a definitive solution to Greece's debt woes and prevent it from dragging down other EU nations.

A barrage of meetings among European finance ministers leaders is to culminate in a Wednesday summit where leaders are expected to shore up the eurozone bailout fund to contain the continental debt turmoil and prevent the nation from a catastrophic default.

Eurozone governments hope the enhanced European Financial Stability Fund, or EFSF, will be able to protect larger countries such as Italy and Spain from being engulfed in the debt crisis.

"This is a critical time and I hope that we reach decisions tomorrow _ that is the will of our partners, and it is our will," Papandreou said as he briefed Greece's president, Karolos Papoulias, on the latest developments. "We must remain clear-headed and calm with a sense of unity on all sides and all political parties."

The prime minister, who stressed that banks must also share part of the burden of bailing out Greece, urged his European counterparts to act, saying Greece was determined to follow through on pledges to reform its economy.

"We Greeks have demonstrated repeatedly, not only that we fulfill our obligations but that we ourselves want to change our country," he said. "Now is the hour for Europe to take the decision needed to stop this escalating crisis, which is creating insecurity for all the people of Europe."

Finance Minister Evangelos Venizelos implied Monday that the government could seek parliamentary approval with a reinforced majority for any decision emerging from the summit related to Greece's debt sustainability. That would mean that two-thirds of the 300 deputies would have to vote in favor.

"It is obvious that the government considers such issues must be handled with an increased feeling of responsibility, and as such be voted on in parliament if possible with a broad majority," Venizelos said in Brussels.

The government has sought to reassure Greeks that it is doing everything it can, but that a certain amount of pain is necessary.

The opposition conservative party, however, has repeatedly disagreed with how Greece's international creditors have gone about rescuing the country, saying that demanding constant austerity measures is not the best way forward. Conservatives have called for tax cuts instead of increases to restart the economy, which is facing a fourth straight year of recession and record unemployment.

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But the conservatives have been largely blamed for the extent of the crisis, with the government saying the country's debt shot up under their five-year rule until late 2009 and that financial data was falsified to project a rosier picture.

Meanwhile, Papandreou has seen his party's strong majority in parliament whittled down to just three deputies, with dissenting lawmakers leaving their posts over austerity votes or being expelled for voting against party lines.

Greek unions have also lashed out against the spending cuts and tax hikes, with frequent strikes and demonstrations that often turn violent.

On Tuesday, public transport workers in Athens held yet another 24-hour strike, leaving commuters to struggle to work through snarled traffic. Last week, a 48-hour general strike shut down services across the country and degenerated into two days of riots in Athens.

Unions say they will stage more strikes in the coming weeks.

Venizelos insisted Tuesday that any solution for Greece's long-term debt would include measures to protect the country's social security funds.

"This fully answers the genuine concerns of social security contributors and retirees," the minister said in a statement.