Business World

Wednesday 17 January 2018

It's bailout or catastrophe, Papademos tells cabinet

Harry Papachristou and Dina Kyriakidou in Athens

Greek Prime Minister Lucas Papademos yesterday told his turbulent coalition government to accept a harsh international bailout deal or condemn the nation to catastrophe.

"We cannot allow Greece to go bankrupt," he told a cabinet meeting. "Our priority is to do whatever it takes to approve the new economic programme and proceed with the new loan agreement."

Papademos, the sole technocrat in a coalition of feuding politicians, tried to assert his authority after six cabinet members resigned over EU and IMF demands for yet more pay, pension and job cuts in return for the financial rescue.

"It goes without saying that whoever disagrees and does not vote for the new programme cannot remain in the government," he said in televised remarks.

Greece faces bankruptcy unless it gets the funds from the IMF and European Union by March 20 when it has to repay €14.5bn in maturing bonds.

A former central banker, Papademos tried to raise Greeks' spirits as the nation enters its fifth year of recession, saying economic growth would return in 2013 despite accusations that the austerity is merely driving Greece into a downward spiral.


Any alternative to the rescue would be much worse, he said in opening remarks using the word "catastrophe" four times.

"The social cost that the programme entails will be limited, compared with the economic and social catastrophe which would follow if we don't adopt it," he said.

Earlier, far-right leader George Karatzaferis said he could not back the tough terms attached to a €130bn bailout and all four cabinet members of his LAOS party submitted their resignations, along with two from the socialist PASOK party.

Adding to the confusion, Greek media said that two of the LAOS cabinet members had resigned only under orders from Karatzaferis and would support the deeply unpopular package when parliament votes, possibly tomorrow or Monday.

The Socialist PASOK party, one of three in the "national unity" government, called on its lawmakers to vote for the bailout, and analysts said they still thought parliament would pass the deeply unpopular package.

Outside parliament, police fired tear gas at black-masked protesters who threw petrol bombs, stones and bottles at the start of a 48-hour general strike against the cuts ordered by the troika.

The biggest police trade union said it would issue arrest warrants for Greece's international lenders for subverting democracy, and refused to "fight against our brothers". A daily newspaper depicted German Chancellor Angela Merkel in a Nazi uniform with a swastika armband.

Finance Minister Evangelos Venizelos made it clear Greece had little choice but to accept the harsh conditions attached to the bailout to avoid a chaotic default next month.

But LAOS leader Karatzaferis begged to differ. "Greeks cannot be hostages and serfs," he thundered.

"We were robbed of our dignity, we were humiliated. I can't take this. I won't allow it, no matter how hungry I am."

The EU and IMF have been exasperated by a series of broken promises and weeks of disagreement over the terms of the bailout, Greece's second since 2010, with time running out to avoid a default.

The ministers gave Athens six days to prove its commitment by passing key legislation, finding an extra €325m in savings, and providing assurances that the programme will remain in force after any election.

The austerity plan includes lowering the minimum wage by 22pc, axing 150,000 public sector jobs and reducing pensions.

Some protesters compared Greece's plight, facing bankruptcy unless it accedes to the demands of international lenders, to its seven years under military dictatorship.

"Do not bow your heads! Resist!" protesters chanted. "No to layoffs! No to salary cuts! No to pension cuts!

Irish Independent

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Promoted Links

Also in Business