Athens News Agency: News in English, 10-05-03

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From: The Athens News Agency at <http://www.ana.gr/>

CONTENTS

[01] Papandreou to brief President of Republic

[02] Eurogroup: 110 bln support package for Greece

[03] Athens Newspaper Headlines

[01] Papandreou to brief President of Republic

According to the prime minister's press office, Papandreou had called the President on Friday and asked him to convene a political leaders' meeting after their own meeting for a detailed briefing on the outcome of the negotiations with the European Commission, IMF and ECB for activation of the EU support mechanism.

PM Papandreou: Big feat ahead

Greece has a big feat to carry out, prime minister George Papandreou told an urgent Inner Cabinet meeting on Sunday, He added his optimism that the country will succeed in this effort despite the immense difficulties, noting that the Greeks have always emerged from difficulties stronger and a victor, while also expressing his total confidence in the forces of Hellenism.

"If we all work together, we will succeed," the premier stressed, as European Commission president Jose Manuel Barroso announced in a written statement released in Brussels that the conditions have been met for responding positively to Greece's request for activation of the support mechanism.

"The Commission considers that the conditions for responding positively to the request by the Greek government are met and recommends that the coordinated European mechanism for assistance to Greece be activated," Barroso said in his written statement, stressing that the cutbacks in spending and reforms Greece has set in motion "constitute a solid and credible package", and thus the support mechanism loans will be decisive in helping Greece put its economy back on track and preserve the euro area's stability.

In a dramatic presentation of the state of the economy and the country, Papandreou stressed that he and his government do not promise easy and painless steps.

[02] Eurogroup: 110 bln support package for Greece

The "laundry list" of state spending cuts, increased taxes, social security reforms and labour market deregulation pave the way for activation of an EU-IMF support mechanism for the Greek economy, agreed to last month.

A draft bill containing the latest austerity measures, reforms and structural changes for the period 2010-2014 will be tabled, debated and voted on in Parliament under an urgent process.

Among measures announced were an increase in the VAT coefficients from 21 to 23 percent, from 10 to 11 percent and from 5 to 5.5 percent, a 10-percent increase in consumption taxes on fuel, tobacco products, alcohol and "luxury" taxes, another one-off contribution by profit-making enterprises, increases in the objective values of real estate and the first-ever taxation of unlicenced buildings.

Papaconstantinou further announced a drastic reduction of the so-called 13th and 14th salaries for civil servants, applicable in both public and private sector pensions, an additional 8 percent cut in civil servants' benefits, reductions in larger pensions and a three-year salary and pension freeze.

The measures further contain drastic changes in the social security system and job market.

To a question on what will be done with those whom, according to the government, are responsible for creating the present situation in the economy, Papaconstantinou stressed that "we will punish those who are responsible, at all levels".

Eurogroup meeting

Eurozone's finance ministers decided on Sunday evening to activate the support mechanism for Greece. According to Eurogroup President Jean Claude Juncker, the total amount of a three-year support mechanism would reach 110 billion euros of which 80 billion would come from the other 15 eurogroup countries and the 30 billion from the International Monetary Fund (IMF).

According to Juncker, who spoke during a joint press conference at the end of the finance ministers' meeting, the European Commission and the European Central Bank have ascertained that Greece's acess to international markets was not sufficient anymore, and for this reason the eurozone decided to activate the support mechanism together with all the legal and technical tools necessary for its activation in all eurozone countries.

Moreover, Juncker announced that a eurozone countries' summit would be taking place on May 7, noting that Sunday's decision would not be re-negociated.

On his part, Greek Finance Minister George Papaconstantinou expressed his satisfaction over the "eurozone's important decision for the activation of the mechanism", noting that the Greek programme is a liable three-year programme which "will lead to the country's fiscal adjustment, to its recovery, to the promotion of necessary fiscal reforms and to the increase of competitiveness."

Papaconstantinou also underlined the Greek government's committment to do everything necessary in order to put the country's economy on the track of viable growth.

Caption:From L-R Greek Finance Minister George Papaconstantinou, Luxembourg's Prime Minister Jean-Claude Juncker, the president of the eurogroup, Olli Rehn the European Monetary Affairs Commissioner arrive at a news conference at the end of a Special European Eurogroup Finance Ministers meeting on Greece Financial Crisis in Brussels, Belgium, 02 May 2010.ANA-MPA/ EPA/OLIVIER HOSLET

[03] Athens Newspaper Headlines

The new austerity measures announced by finance minister George Papaconstantinou on Sunday and the eurogroup's approval of activation of a 3-year 110 billion euros support package for the Greek economy for the period 2010-2013 dominated the headlines in Athens' newspapers on Monday.

ADESMEFTOS TYPOS: "The 13th and 14th salaries (Christmas full-salary and Easter and summer holiday half-salary bonuses) in public sector to become 500 euros benefit - Dejection at Sunday's urgent Inner Cabinet meeting, but the harsh measures were approved".

APOGEVMATINI: "Hope sought...Government admits failure of Stability Program and imposes harsher sacrifices on the people, without presenting plan for exodus from the crisis".

AVRIANI: "Hunger and poverty for salary and pension earners - Salaries and pensions razed".

ELEFTHEROS TYPOS: "PASOK now serving the IMF (International Monetary Fund), the European Commission and the European Central Bank (ECB)".

ELEFTHEROTYPIA: "4 years without a breath - Bleeding of 41.6 billion euros (from the people) to avert bankruptcy".

ESTIA: "Critical hours for Greece - New measures announced in dramatic tone".

ETHNOS: "Suffocation for five 'stone' years - Another 30 billion euros on the backs of the salary and pension earners".

IMERISSIA: "Survival with 30 billion euros in sacrifices - Historic wager for economy, society".

NAFTEMPORIKI: "Era of long-term austerity with harsh reversals - Salaries, pensions, labor relations and new taxes at the spearhead of the 'package' (of austerity measures)".

TA NEA: "The great sacrifice - Salaries and pensions being cut for 110 billion euros (EU rescue package) - Bulldozer for public sector, pensioners".

VRADYNI: "Sacrifices without prospect - The new austerity measures are of unprecedented harshness".

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