Greek Leaders Pledge Austerity Support as European Doubts Grow

Posted February 15th, 2012 at 3:30 pm (UTC-5)
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Greece's coalition leaders are pledging to carry out the country's latest austerity plan, but the government also pointedly acknowledges some of its European neighbors may want the country out of the 17-nation eurozone.

Both socialist leader George Papandreou, the country's former prime minister, and conservative leader Antonis Samaras sent written pledges to eurozone finance ministers that they support the economic reforms adopted by parliament last weekend, even as thousands of workers rioted in the streets of Athens against the reforms.

But Samaras hedged his support, saying new policies might need to be altered to promote economic growth in Greece, now mired in the fifth year of a severe recession.

Some European leaders have grown distrustful that Greece will actually impose spending cuts and are wary of handing it a new $172-billion bailout, its second in two years. The chief of the eurozone finance ministers, Luxembourg Prime Minister Jean-Claude Juncker, said late Wednesday that officials now have enough information to decide next Monday whether to approve the new Greek assistance.

Greek Finance Minister Evangelos Venizelos complained that Greece's European neighbors are constantly making new austerity demands on it and may be seeking to push it out of the eurozone.

“We are, however, facing a peculiar situation, because we have new terms and new preconditions continuously. This is due to the fact that there are visible powers internally in Europe that are playing with fire because they believe the October 26 European Council agreement might not be implemented, and the specifications will not be kept to, and who possibly may want Greece out of the eurozone.”

French Foreign Minister Alain Juppe said he understands the reasons for the revolt of the Greek populace against the austerity measures, but blamed the Athens government for its plight in having to impose even more spending cuts.

“We are asking from the Greeks extremely painful sacrifices, that is true. And I understand the irritation, revolt from some of its population. We also need to take into account that Greece has made many errors in the past. It received a lot of help and unfortunately hasn't presented the exact accounting figures and we are about to help Greece massively.”

Several northern European officials have voiced increasing frustration with the Greek government, yet fears that a Greek default next month on $19 billion in financial obligations could severely impact the European and world economies.

Germany, Europe's most robust economy, said it wants to continue to support Greece. But Finance Minister Wolfgang Schaeuble warned that “we are not going to pour money into a bottomless pit.”

In addition to seeking the bailout approval, Greece is nearing completion of negotiations with large private creditors to cut in half the debt it owes them, a $132-billion reduction. But its economy is continuing to shrink, falling at a seven percent annual pace in the past three months of 2011.

The eurozone said Wednesday its economy slid three-tenths of a percent in the fourth quarter last year.