NEWS

Sarkozy says Europe will offer support

French President Nicolas Sarkozy yesterday threw the full weight of his support behind Greece and its efforts to bring about an economic recovery and gave the clearest indication yet that Paris is examining «precise measures» that would form a European assistance package for Athens if needed. As part of an international trip that had already taken him to Berlin for talks with German Chancellor Angela Merkel and will this week see him in Washington for discussions with US President Barack Obama, Greek Prime Minister George Papandreou was in Paris yesterday to hear words of encouragement from Sarkozy. «France is by the side of Greece in the most resolute fashion,» the French president said at a joint news conference at the Elysee Palace. «The euro is our currency. It implies solidarity. There can be no doubt on the expression of solidarity.» It appears that these words were exactly what Papandreou wanted to hear, as he again emphasized that, having taken harsh steps to reduce its public spending and increase its tax revenue, Greece is not looking for financial assistance at this time. «We are not asking for money. We simply ask to be able to borrow on similar, if not the same terms, as the eurozone countries,» he said. «We faced a financial problem and took measures on the basis of ECB (European Central Bank) and IMF (International Monetary Fund) proposals. However, if there is a problem due to speculation, we will need solidarity.» Papandreou had also received moral and political support from Merkel in Germany but Sarkozy appeared to go a step further by suggesting that his finance minister is working with her European Union counterparts to set up a system to come to Greece’s rescue, should Papandreou’s measures fail or if speculators continue to bet on the country defaulting. «If Greece needs help, we will be there,» said Sarkozy. «The main actors on the European stage are determined to do whatever is needed to make sure Greece is not isolated. Christine Lagarde, in tandem with her colleagues in the eurozone and in Europe… is working on a certain number of precise measures if Greece needs them.» The French president did not give any more details but underlined that it is vital the EU prevent speculators from pushing up the cost of borrowing for Greece. «This problem could hit lots of countries if we do not come up with a collective response,» he said. «Concrete, precise measures exist [to combat speculators], which we will not be communicating tonight but which, at the given moment, will show that Greece is not just being supported politically but also in all aspects of any requests that may be made.» Papandreou also suggested that some groundwork is being done to put together a support package for Greece. «After my meetings, more specific ways are beginning to emerge about how to deal with any possible borrowing problems,» he said. Most disagree with majority of austerity measures Few of the measures announced by the government last week in a bid to raise an extra 4.8 billion euros to plug a hole in public finances have wide public support, an opinion poll conducted for Sunday’s Kathimerini suggests. The Public Issue poll indicates that only two of the key fiscal steps have substantial backing. Eight in 10 of those questioned said that they are in favor of the new tax on luxury goods, such as cars that cost more than 30,000 euros or yachts. This measure is one of the less significant ones introduced by the government, as it aims to raise just 100 million euros. The other step that appears to be popular with the public is the increase in tax on cigarettes and alcohol, which is supported by 65 percent of the 530 respondents. Half of those polled are in favor of a further cut in public servants’ pay but only 23 percent support slashing the two extra monthly wages that bureaucrats receive annually. Also, 68 percent of those questioned are against the rise in value-added tax, 74 percent oppose a freeze on pensions and 78 percent disagree with the hike in fuel tax. Speaking on Saturday, Deputy Prime Minister Theodoros Pangalos said that the government had no choice but to take some harsh measures. «I am not happy that we have to take these steps because, like every politician, I would prefer to have money to spend on public investments and achieving social justice,» he said. «The government trusts the average Greek and we know that he has understood the real situation and does not want easy solutions that will have catastrophic results.» Pangalos said that he is against the idea of employers in the private sector also cutting workers’ wages, as he does not believe this would do anything to improve the country’s competitiveness.