Greek lawmakers looked set to agree to a deeply unpopular bailout deal yesterday to avert what Greek Prime Minister Lucas Papademos warned would be “economic chaos,” while Germany demanded that Athens change its ways to stay in the eurozone.
The austerity bill sets out 3.3 billion euros (US$4.35 billion) in wage, pension and job cuts as the price of a 130 billion euro rescue package from the EU and IMF — Greece’s second since 2010.
Greece needs the funds before March 20 to meet debt repayments of 14.5 billion euros and the bill has stirred anger on the streets and turmoil within the coalition government.
Addressing the nation late on Saturday, Papademos warned that failure to back the bill would mean a disorderly default and “set the country on a disastrous adventure.”
“It would create conditions of uncontrolled economic chaos and social explosion,” he said. “The country would be drawn into a vortex of recession, instability, unemployment and protracted misery and this would sooner or later lead the country out of the euro.”
However, eurozone paymaster Germany ratcheted up the pressure, saying Europe needed action, not words.
“The promises from Greece aren’t enough for us any more,” German Finance Minister Wolfgang Schaeuble said in an interview published yesterday in Welt am Sonntag newspaper.
“Greece needs to do its own homework to become competitive — whether that happens in conjunction with a new rescue program or by another route that we actually don’t want to take,” he added.