PM reinforces concerns

Papademos unable to reassure party leaders on wage cuts, stresses need for reforms

Prime Minister Lucas Papademos was Friday unable to give opposition party leaders the reassurances they sought that wages and pensions will be protected from further cuts but stressed that the full implementation of reforms was crucial to safeguard the country?s eventual exit from the crisis.

Responding to questions by Giorgos Karatzaferis, leader of the Popular Orthodox Rally (LAOS), which broke from the governing coalition in February, and by the head of the Coalition of the Radical Left (SYRIZA), Alexis Tsipras, the premier did not try to present a rosy picture. The aim is to avoid further wage cuts, he said. ?But there can be no commitment.?

He added that the outlook for rising unemployment was not good, noting that ?joblessness will probably increase and the recession will probably continue.?

?The economy will remain weak for the most part of 2013,? he added, revising a more optimistic prediction he had made a few weeks ago of a likely recovery from the middle of next year. ?This year will not be easy. And the beginning of next year will not be easy,? he said.

On pensions, Papademos said the state had the capacity to fund them until 2015 but that state funding and benefits must be cut to ensure their viability after that.

As for further cuts of 12 billion euros that the government has promised creditors, Papademos said authorities were drafting proposals on how these cuts will be achieved. The tough job, however, of implementing the proposals and raising the revenue will fall to the next administration. ?The next government and the next parliament will decide,? he said, adding that ?the decisions won?t be easy.?

Comments by the premier to Italian daily Il Sole 24 Ore in an interview published Friday were also downbeat. Papademos said he could not rule out a third bailout. ?Greece will do everything possible to make a third adjustment program unnecessary,? he said. ?Having said that, markets may not be accessible by Greece even if it has implemented fully all measures agreed on. It cannot be excluded that some financial support may be necessary.?

Papademos is urging ministers to focus on approving reforms ahead of elections, expected on May 6. One of the reforms -- the liberalization of the taxi sector -- is to be debated in Parliament on Monday. A bill outlining the changes was tweaked Friday after MPs proposed changes.