Greece to start austerity drive as nation seethes

Reuters
June 5, 2011

Greek Prime Minister George Papandreou starts a campaign on Monday to secure a new international bailout by imposing years of austerity on a nation already seething over corruption and economic mismanagement.

Unease is growing within Papandreou's ranks about the consequences of waves of budget cuts demanded under successive deals with the European Union and IMF -- and this could turn into alarm after at least 80,000 Greeks crammed a central Athens square to vent their anger over the nation's dire state.

As the government struggles to prevent Greece from defaulting on its debt, the Socialist cabinet will discuss informally on Monday the medium-term economic plan which will impose 6.4 billion euros ($9.37 billion) of extra austerity this year alone.

This is just the first stage of a drive to turn the plan, agreed on Friday with the EU and IMF as the price of a new financial rescue, into law.

Papandreou will then present the plan to the political council of his PASOK party on Tuesday, before the cabinet clears it the following day and sends it to parliament.

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