NEWS

PM warns of harsh steps

Prime Minister George Papandreou yesterday prepared the ground for his government to announce new austerity measures in the next few days as he warned Greeks that their country faces bankruptcy unless some «harsh» steps are taken. «Unfortunately, history has confirmed our worst fears,» he said during an address in Parliament. «Our duty today is to forget about political cost and think only about the survival of the country. Past policies make it necessary to proceed with harsh changes. «The dilemma we face is: Are we going to let this country go bankrupt or are we going to react?» said Papandreou, referring to the impact that speculation against Greece is having. «We became the weak victim, the guinea pig,» he added. «We stood unprotected before the markets’ wild appetite.» Sources said that MPs were shocked by the somber nature of the prime minister’s speech and saw it as a precursor to the announcement of more public spending cuts and tax hikes over the next few days as Greece has to raise a reported 3.5 to 4.8 billion euros more to reduce its deficit by 4 percent of GDP this year. «We must do whatever we can now to address the immediate dangers,» said Papandreou. «Tomorrow, it will be too late and the consequences will be much more dire.» The prime minister insisted that Greece is not expecting other countries to rush to its assistance with loans but that the government needs political support so that its lending costs begin to drop. «No other country will pay our debts,» he said. «It is a matter of honor and pride for our country to put our house in order.» This was also the message coming from French Finance Minister Christine Lagarde, who said yesterday that Greece was guilty of a «failure to observe discipline» and must prove on its own that it is serious about fixing its public finances. «Greece has told us in the past: ‘I’ll do this, I’ll cut that, I’ll squeeze here and I’ll collect more.’ But they haven’t been able to do it,» she told SBS TV in Australia. «So they have to demonstrate they can do it and, in consideration, members of the eurozone will be prepared to help Greece if that is necessary.»