NEWS

PASOK MPs take minister to task over economic policy

Finance Minister Giorgos Papaconstantinou on Tuesday faced a grilling from PASOK MPs, who accused the government of adopting too many austerity measures and of being too quick to bail out Greek banks.

Papaconstantinou who later this week will face representatives of the European Commission, European Central Bank and the International Monetary Fund – collectively known as the troika – in Athens, as well as fellow finance ministers from eurozone countries at a meeting in Hungary, had to first feel the wrath of PASOK MPs.

Former minister Vasso Papandreou was one of Papaconstantinou?s most vehement critics during yesterday?s meeting, as she has been for some months. ?You have no overall plan,? she reportedly told the finance minister. Papandreou argued that the economic policy being followed by the government is not producing results as Papaconstantinou is constantly forced to announce new cost-cutting and revenue-raising measures.

Another PASOK deputy, Sofia Yiannaka said that she was finding it very difficult to support the government because it continuously denies that it is going to adopt measures but subsequently always does. Papaconstantinou replied that he has never denied that more measures would be needed. He said that he has, however, committed to not making across-the-board cuts to public sector wages and pensions.

Socialist deputy Nadia Giannakopoulou questioned the government?s decision to agree to provide Greek banks with a further 30 billion euros in bailout funds. She pointed out that when the previous New Democracy administration had made 28 billion euros available to banks, PASOK, then in opposition, had made a big fuss. Papaconstantinou said that the government had to provide the guarantees to ensure a strong domestic banking system and that banks would continue to lend to Greek businesses. He said this would also help exports and move the economy toward growth in 2012.

On Thursday, Papaconstantinou will have to explain to finance ministers from eurozone countries why Greece?s deficit for 2010 has been revised upward from 9.5 percent of gross domestic product to 10.6 percent.