NEWS

PM seeks to lift economic gloom

In a relatively rare move, Prime Minister George Papandreou is to take part in a live televised news conference on Monday in what is being seen as a bid to address voters’ fears about the state of the economy ahead of the November 7 local elections. Sources said yesterday that Papandreou’s main aim will be to assure pensioners and civil servants that their earnings are not going to be raided again this year, even if Greece’s 2009 deficit is revised upward even further. It is expected that the European Commission will confirm on November 15 that the deficit for last year was over 15 percent of gross domestic product. European Economic and Financial Affairs Commissioner Olli Rehn has suggested that this could lead to Greece having to take more austerity measures this year but the government has flatly denied this. Concerned that PASOK will face a growing backlash against the austerity measures at the ballot box next month, Papandreou sought to announce initiatives to give money back to some Greeks yesterday, rather than inform them of other ways in which their income would be whittled away. In what is likely to be a foretaste of the kind of approach that he will take on Monday, when he will be keen to emphasize schemes to help low-income earners, Papandreou said yesterday that 500,000 pensioners with low earnings would receive a one-off bonus payment of 200 euros each by the end of the year. He also said that the government would arrange for unemployed Greeks to receive free medical treatment and medicines. PASOK is hoping that these types of schemes will help lift the public’s mood, which would only have been dented further yesterday by news that the European Union is moving closer to adopting tough measures for member states that fail to keep to deficit and debt limits. Under the proposals, which are to be given the green light at a summit of leaders in Brussels on October 28-29, countries whose debt is more than 60 percent of GDP will have to reduce it by 5 percent each year until it falls below the limit. Greece is forecast to have a debt of 144 percent of GDP in 2014, when the terms of its emergency loan agreement with the EU and the International Monetary Fund expires.