PM to show hand on economy

All eyes in Brussels will be on Prime Minister George Papandreou today as he is expected to announce the measures his government plans to implement to curb the spiraling debt and deficit that led to the country’s credit downgrade last week. But attention in Athens will be just as keen as workers wait to hear about the rumored «austerity measures» that may hurt their incomes. Papandreou is expected to announce the measures later in the day following talks with representatives of labor unions and business groups. He is expected to attempt a difficult balancing act, telling Brussels that the measures to be taken will be hard-hitting enough to get the Greek economy back on the road to recovery, while reassuring citizens that there will be no freeze on salaries or severe cutbacks on public sector hiring. It is unlikely that such a strategy will go down well with Greece’s partners in the eurozone, many of whom are expecting drastic measures such as the severe public sector salary cuts heralded by Ireland. Meanwhile, a delegation of analysts from credit rating Moody’s is expected in Athens today for an inspection visit. The visit follows a downgrade by the agency Fitch and a warning by Standard & Poor’s. Tomorrow Papandreou is to meet opposition party leaders for crisis talks on curbing the corruption that the premier has acknowledged «is endemic in Greek society» as well as tax evasion. In comments over the weekend, Finance Minister Giorgos Papaconstantinou said he was planning to introduce a «completely different type of taxation» to crack down on those evading their dues. Other structural reforms on the cards include the opening up of «closed shop» occupations – including notaries and accountants – and much-delayed social security reform.

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