PM braces for tough reception in Thessaloniki

As the country?s international creditors continued to pile pressure on Greece to implement tough reforms to qualify for emergency loans, Prime Minister George Papandreou on Friday traveled to Thessaloniki, where he is this evening to address the elite of the Greek political and business world with a speech that is expected to focus on obligations rather than promises.

Traditionally, the Thessaloniki International Fair (TIF) has been the annual event at which the prime minister sets out his policy for the coming year.

Before the debt crisis took hold, it was also a stage for heralding public handouts. This year handouts are out of the question but it also appears unlikely that Papandreou will offer any policy surprises as the obligations of his administration to creditors are well known – the enforcement of tough reforms ranging from the opening up of restricted professions to a crackdown on tax evasion.

In addition, the government must find a way of making up for a 1.7-billion-euro shortfall in the national budget without resorting to further tax hikes. It is likely that authorities will push ahead with a highly controversial plan to put civil servants on ?labor standby status,? which would mean they receive 60 percent of their basic salary for 12 months before their status is reassessed.

According to sources, Papandreou is expected in his speech to focus on what needs to be done over the coming days if Greece is to satisfy conditions for emergency loans and secure a sixth installment of 8 billion euros on which the country?s solvency depends.

Meanwhile, sources in the prime minister?s office expressed concerns about growing frustration and anger among Greece?s eurozone peers about the country?s failure to push through reforms.

Germany?s Economy Minister Philipp Roesler on Friday joined the chorus of European politicians intensifying pressure on Athens to accelerate the implementation of reforms.

Roesler expressed ?serious concern? following last week?s unexpected suspension of talks between the Greek government and visiting envoys of the country?s foreign creditors – the European Union, the International Monetary Fund and the European Central Bank.

France?s Finance Minister Francois Baroin also turned up the pressure on Greece, noting that the government must strictly adhere to the conditions attached to emergency loans if it wants continued European support.

In comments published in Le Figaro, Baroin also called on eurozone members to honor the terms of a second bailout hammered out in Brussels in July with the aim of creating a strong European rescue fund and paving the way for the release of more aid to Greece.

Baroin?s predecessor, Christine Lagarde, now the chief of the IMF, emphasized on Friday that Greece – as well as Ireland and Portugal – should work harder to meet deficit reduction targets. But she criticized the governments of EU countries for dragging their feet in implementing the pact. ?It is essential that eurozone leaders implement their groundbreaking July 21 commitments as soon as possible,? she said.

Greece?s Finance Minister Evangelos Venizelos echoed Lagarde in a statement issued late on Friday in response to a flurry of media reports – foreign and local – suggesting that Greece would default over the weekend. ?This is not the first organized wave of rumors about Greece ostensibly being about to default,? Venizelos said, blaming ?speculators against the euro and the eurozone in general.?

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