NEWS

PM heralds spending cuts

In an effort to prove domestic and European critics wrong by showing that Greece can cut public spending and that the government does have a plan for dealing with the economic crisis, Prime Minister Costas Karamanlis briefed his Cabinet yesterday on what measures need to be taken. The premier announced 12 steps to cut expenditure but, with one eye on opinion poll ratings, he made it clear that spending in some areas such as education and health would not be touched. Among the measures unveiled by the prime minister were a 10 percent cut in the budget of most ministries, an identical reduction in spending on contract workers and a ban on the hiring of any more permanent or temporary staff in the public sector. Each minister will have to submit a balance sheet to the Economy and Finance Ministry every three months to show that his ministry is in line with the measures. Mirroring moves in other countries, such as the USA, aimed at limiting the wages of managers in some sectors of the economy, Karamanlis also announced that officials in the public sector would not be able to earn more than 6,000 euros per month. The prime minister is due to head for an emergency meeting of European Union leaders on March 1 and with Greece now faced with the excessive deficit procedure, the measures announced by the prime minister were done so with Brussels in mind. Sources said that the prime minister made it clear to his ministers that the government’s survival, as well as the country’s future, depended on them being able to adapt to the new situation in which they now find themselves. «There is no room for other priorities or thoughts,» he is reported to have said, apparently ruling out the possibility of calling elections soon. PASOK leader George Papandreou responded by explaining the steps he would take at Sunday’s EU summit, including the renegotiation of the Stability Pact in a bid to spur greater growth given the current asphyxiating economic conditions.