NEWS

Living on borrowed time

As the government prepares to announce a new raft of austerity measures today in order to curb its bloated budget deficit and reassure global markets, Prime Minister George Papandreou issued his most dramatic appeal yet for understanding from politicians and citizens alike for the extreme action necessary to get the Greek economy back on its feet. «We are in a race against time to keep our economy alive,» Papandreou told a briefing of his Socialist party’s parliamentary group late yesterday. «If we don’t ensure that we can borrow at the same rates [as other EU member states], the consequences will be beyond catastrophic,» he said. The new measures, which come on top of the wage freezes and tax increases heralded in the government’s original crisis plan, are to be announced after today’s Cabinet meeting. They could include a 2 percent increase in value-added tax, which now stands at 19 percent, a further hike in fuel tax and a new tax on luxury goods. Also on the cards is the abolition or reduction of the so-called 14th salary – one of two additional wages given to public sector workers. Government officials yesterday avoided commenting on the fate of the 14th salary – a full wage paid at Christmas time and with great symbolic value – but speculation raged in the media about its abolition. It was cited as the main pretext for a new 24-hour strike called for March 16 by the civil servants’ union, ADEDY. Papandreou played down its significance in a speech before PASOK’s parliamentary group. «If we behave irresponsibly, we face the risk of being unable to pay not only the 14th salary but the 6th salary and pensions, too,» the premier said. «This might sound like a nightmare scenario but it’s true,» he added. Earlier yesterday, Government Spokesman Giorgos Petalotis said it was «common knowledge» that the average Greek recognizes the critical nature of the current situation and is prepared to make sacrifices, on two conditions: «Firstly, that those who have always avoided paying pay this time, and secondly that there is light at the end of the tunnel.»