By George Georgiopoulos and Renee Maltezou
The Greek government warned dissenters in the ruling party on Wednesday against rejecting an austerity plan agreed under a new international bailout deal, after data showed the depth of the nation’s economic crisis.
Prime Minister George Papandreou is meeting senior members of his socialist party (PASOK) to try to stem an outbreak of unrest over the social cost of the bailout before it turns into a full-scale parliamentary rebellion.
Tens of thousands are protesting regularly against waves of austerity demanded by the European Union and IMF, as well as corruption and state mismanagement, while workers at state firms earmarked for privatisation have called a strike for Thursday.
But government spokesman George Petalotis dismissed suggestions that Papandreou would take the “easy” way out of the crisis by calling early elections. These would be a likely consequence if any PASOK backbench rebellion led to parliament rejecting the government’s medium-term economic plan.
“Everyone has a responsibility, today more than ever, for the future of this country,” Petalotis told Real FM radio.
PASOK says it inherited the debt and budget crisis when it defeated the conservative New Democracy party in 2009, but has repeatedly stressed it aims to serve its full four-year term.
“For us it would have been very easy to say ‘let’s have elections, why carry this bomb we inherited to the end’?” he said. “Elections would have worse consequences for the country.”
Opinion polls show PASOK’s lead over New Democracy has vanished, suggesting that new elections could produce a stalemate during which the latest IMF/EU rescue could unravel.
Papandreou is meeting PASOK’s political council, hoping to win their backing for the medium-term plan. This lays out years of austerity and faster privatisation, agreed with the EU and IMF to secure the second financial rescue in just a year.
Greeks are suffering. Unemployment climbed to 16.2 percent in March, the highest in the euro zone after Spain, data showed on Wednesday. Industrial production tumbled 11.0 percent year- on-year in April as Greece suffers its third year of recession, public spending cuts and higher taxes. [ID:nLDE7570L8]
MORE BAD NEWS?
More bad news is likely on Thursday when economic output data for the first quarter is released. An earlier flash estimate showed GDP shrank 4.8 percent from the first three months of last year, on top of sharp drops in 2009 and 2010.
Sales of state assets to help reduce Greece’s 340 billion euro government debt form a central part of the medium-term plan, but workers are putting up a fight.
Employees of state companies down for privatisation, such as power utility PPC (DEHr.AT), telecoms company OTE (OTEr.AT) and water companies EYDAP (EYDr.AT) and EYATH (TWSr.AT), will walk off the job for 24 hours on Thursday.
Greece’s main private and public sector unions, GSEE and ADEDY, have called on workers and the elderly — whose pensions have been cut — to rally in central Athens in solidarity.
Until now dissent has been muted among the ruling Socialists. But Greeks have staged nightly protests for a fortnight in the capital’s Syntagma Square to hurl abuse at the parliament building, with numbers hitting over 80,000 on Sunday.
Many PASOK backbench members of parliament appear to be taking fright. Finance Minister George Papaconstantinou suffered a roasting when he presented the medium-term plan to senior party members at a meeting that lasted about 12 hours.
Greece, which has a huge budget deficit but has been frozen out of debt markets for a year, seems to have no alternative but to depend on the EU and IMF and accept their demands.
One PASOK lawmaker, Paris Koukoulopoulos, recognised that the minister’s report on achievements so far had been sincere. “But what’s important is that we have emptied the banks of deposits and filled the city squares with people,” he said.
Newspapers reported that Papandreou had ordered his finance minister to take the attacks on the chin and allow the backbenchers to vent their rage, in the hope that they will cool down eventually and vote for the plan in parliament.
The government wants parliament to decide on the plan before the end of this month. Many PASOK lawmakers would risk losing their seats if early elections were held, meaning that they may have second thoughts about voting against it.
