Greece must implement measures for continued aid, FinMin says

Greek Finance Minister Evangelos Venizelos appealed to his countrymen and opposition parties on Monday to back austerity measures or face being cut off by international lenders, after a poll showed Greeks opposed last week’s EU rescue deal.

Venizelos said an agreement clinched at a summit in Brussels to secure a fresh 130 billion euros in EU/IMF funding and a 50 percent reduction in Greece’s 200 billion euros of privately-held debt must be swiftly implemented.

“This will not be feasible without a united internal front, without Greek citizens backing the efforts of the government and the country,» Venizelos, whose Socialist party holds a slender majority in parliament, told Ta Nea newspaper.

“If we do not achieve the execution of the 2011 budget, if we do not start implementing the 2012 budget, everything will be in doubt again. There won’t be any new program,» he said.

An opinion poll published by To Vima newspaper on Saturday showed that most Greeks has responded negatively towards the EU package to rescue Greece from default. Around half said the agreement jeopardized national sovereignty.

Anger at more austerity measures demanded by international creditors after Greece missed deficit targets under its bailout program erupted into protests in many towns and cities during a national holiday on Friday, forcing the cancellation of a major military parade.

With Greece’s economy trapped in a third year of recession and unemployment running at a record level of 16 percent, many Greeks say fresh cuts to wages and pensions threaten to drive them into penury.

The ruling Socialist party has been reduced to 153 seats in Greece’s 300 member parliament after expelling a dissent lawmaker this month who opposed labor reforms.

With the opposition refusing to support austerity measures and a series of tough legislative votes looming — including on next year’s budget and the EU summit deal — many are concerned that Prime Minister George Papandreou could be forced into calling snap elections.

Venizelos said fresh elections in the midst of the reforms process would deal a blow to Greece’s credibility with its EU partners and international markets. He accused the conservative main opposition party New Democracy of placing electoral interests above the good of the country.

“In the name of whom can there be a negative vote when, for the first time, the parliament will have the chance to decide a cut and not a rise in the public debt?» Venizelos said

“We can succeed as long as we are serious, united, responsible and aware of the situation and the history.”

The minister said the main losers under the last week’s agreement would be bankers, who would see the value of their Greek debt holdings slashed, not ordinary Greeks.

“But between the nation and the banks, the nation must come first,» Venizelos said, suggesting it would be necessary for the state to take a temporary stake in Greek banks to recapitalize them after the haircut. «We do not want to alter the private nature of the banks but we want the state to emerge with gains from capitalizing the banks.”

The minister said that those who said that the Oct. 26 decisions set a limit to Greece’s sovereignty were demagogic.

“The ownership of the whole procedures and the responsibility for their implementation lies with the Greek government and the Greek parliament,» he said. [Reuters]

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