Financial Times
June 6, 2011
Greece’s prime minister has attempted to win backing from his fractious government for a fresh austerity package overseen by the European Union and the International Monetary Fund, amid threats of mass resignations by socialist deputies and unprecedented street protests in Athens.
George Papandreou was seeking specific commitments at Monday’s cabinet session from hardline socialist ministers opposed to structural reforms seen as critical to rescuing the economy, according to officials in his Panhellenic Socialist Movement party (Pasok).
Yet even if he manages to rally the cabinet behind him, Mr Papandreou faces more battles to convince parliamentary deputies and senior party officials that unless reforms are accelerated, the country will lose the backing of European partners and be forced to default.
Greece’s political divisions have grown even as EU officials have been putting together a bail-out deal worth almost €100bn ($146bn) that would be endorsed by Europe at a summit this month, following approval by the Athens parliament.
“It’s very disturbing that just as Europe agrees to save Greece, its politicians appear to have lost the courage to proceed,” said Yannis Stournaras, director of Iobe, an Athens think-tank.
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