Greece to impose more cuts
Published 03/03/2010 | 05:00
THE Greek government is expected to announce as much as €4.8bn of additional deficit cuts today, bowing to pressure from the EU and investors to do more to tame the region's biggest shortfall.
The new measures will include higher tobacco, alcohol and VAT as well as deeper cuts in public workers' bonus payments. Greek bonds advanced for a third day yesterday on hopes the deficit measures might ease opposition to EU aid for Greece.
The announcement will come two days before Prime Minister George Papandreou meets Germany's Angela Merkel and may help the chancellor justify aiding Greece to taxpayers and political opponents who say the country should not be bailed out.
Mr Papandreou said in a speech yesterday to his Pasok party in Athens that the new measures would be "painful" and that civil servants, who have already seen their wages frozen and benefits cut, "will have to get by on less".
The main union for public works plans its third general strike of the year on March 16.
"If our country doesn't manage to borrow with similar terms as is normal for a European Union country then the consequences will be something more than catastrophic," Mr Papandreou said.
"Our responsibility is to avoid this catastrophe."