Greek PM pledges to meet fiscal targets
George Papandreou vows to continue the unpopular debt relief plan despite mounting street protests.
Last Modified: 11 Sep 2011 00:18


The Greek prime minister has vowed to follow the austerity demands of his debt-ridden country's creditors despite continued street protests against the measures.

"At the point where the eurozone is now... every delay, every hesitation, every option other than strict compliance with our commitments... is dangerous for the country and its citizens," George Papandreou said on Saturday.

"Every time we have postponed or hesitated it has cost us dearly," the premier said in his address, promising to take "all other necessary measures" to ensure the country meets its commitment to reducing the budget deficit.

As Papandreou delivered his annual, keynote speech on the economy in Greece's second-largest city of Thessaloniki, police on the streets outside clashed with demonstrators as more than 25,000 people - from taxi drivers to sports fans - joined a wave of anti-austerity protests.

Two people were arrested and at least two others were injured during the clashes in the northern port city.

Austerity commitments

Greece has already committed to slimming down the public sector, liberalise the labour market and sell off state enterprises.

Eurozone leaders announced a $223bn rescue package for the country in July, but Athens is having difficulty meeting the conditions to receive its next instalment of funding, with sufficient cash in reserve for only a few weeks.

Many Greeks fear that the state sell-off will be too cheap, and complain that some 20,000 state employees will be laid off and many others will have their wages cut amid unemployment that reached 16 percent in June.

Papandreou faces a difficult task of calming the social climate amid German calls for more budgetary discipline and recurrent rumours that Athens will have to pull out of the eurozone because of the debt crisis.

On Saturday, he reiterated his government's commitment to speeding up privatisation and shrinking the public sector, as demanded by the European Union and the International Monetary Fund.

"We will prove wrong all those who are betting on the country to fail... on a Greece far from the euro, those who want to buy the country for a bowl of lentils," the premier said.

On the topic of relaunching the economy, he announced a new oil and gas exploration programme.

Police respond to 'indignant' protesters

Meanwhile, anti-riot police used teargas to push back about 3,000 taxi owners among the protesters, picketing over liberalisation of their industry - one of the many reforms announced by the government to achieve savings.

A record 7,000 police were on duty to respond to protests, organised by an "indignant" group named after a similar youth protest movement in Spain.

Members of Greece's private and public sector unions were also out in force, along with supporters of the local Heraklis football club protesting against their exclusion from the first division.

Greece on Friday vehemently rejected rumours that it may default at the weekend, blaming them on a speculative plot against the euro.

German Chancellor Angela Merkel called on Papandreou ahead of his speech not to waver in his reform drive.
"Greece knows that credit is only available if it meets its obligations," she said in an interview to be published on Sunday in Berlin's Tagesspiegel newspaper.

At the same time she urged her compatriots to be patient with Greece, saying, "What hasn't been done in years cannot be done overnight."

Der Spiegel magazine reported on its website that finance ministry officials were contemplating two scenarios should Greece become bankrupt: one where the country stays in the eurozone, and another where it re-introduces its former currency, the drachma.

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