PM in a quandary after EU assessment

Prime Minister Costas Karamanlis will chair the weekly meeting of a government economic policy committee today with the aim of devising a response to the European Commission’s verdict on the country’s economy, which suggests that the conservatives will have to rein in public spending and handouts. Economic Affairs Commissioner Joaquin Almunia said yesterday that Greece would be one of six European Union members that will face excessive deficit procedures from last month (see last page). The government had been expecting the decision but now must decide how to react to it. Some conservative sources believe that it means Karamanlis will put any thoughts of snap polls on the back burner because a tightening of the purse strings will not allow any room for a generous social policy that could win over voters. However, others within the government camp believe that Karamanlis will be left with no choice but to call elections because it will have to take some unpopular decisions in the near future as a result of the Commission’s supervision of the economy. Greece will find out next month how long it has to bring its public deficit into line with the eurozone limit. Sources have said that Karamanlis is hoping that he will be able to find ways in common with other EU leaders to get out of the tough economic situation when they meet for a summit on March 1. «The government will do whatever is necessary so that there are as few consequences as possible for citizens and the country,» said government spokesman Evangelos Antonaros. PASOK responded to Almunia’s comments by saying that it proved the government does not have a proper plan to deal with the economic crisis and that its forecasts were overly ambitious.

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