Tuesday, June 21, 2011

Barroso offers Athens austerity incentive

Financial Times
June 21, 2011

Greece’s embattled politicians have been offered a fresh incentive to approve deep spending cuts next week, after the president of the European Commission promised to accelerate the disbursal of €1bn ($1.4bn) in development grants to Athens if austerity measures were approved.

Announcing the initiative, which he intends to raise at a European Union summit on Thursday, José Manuel Barroso also reminded Greek voters that the new carrot would not eliminate a very big stick: the prospect of a sovereign default if the parliament does not approve the €28bn austerity package.

“If anyone thinks, ‘Well, without the programme agreed with the EU and the IMF [International Monetary Fund] we can still get by somehow, there’s an alternative programme’, that’s not true,” Mr Barroso warned. “There is no alternative programme . . . The alternative would be worse than the current situation. I’m absolutely certain of this.”

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