Greece has admitted it still faces a tough job in persuading the EU and IMF to save it from bankruptcy even after parliament approved savage extra budget cuts, provoking a night of looting and burning in central Athens.
A suspicious EU has told leaders of the two parties left in the government of technocrat Greek Prime Minister Lucas Papademos to give written commitments by today that they will implement the pay, pension and job cuts after elections expected in April.
As parliament debated the austerity package on Sunday night, riot police fought running battles with protesters outside. By daybreak on Monday, 93 buildings had been wrecked or seriously damaged in the city center, some of them historical monuments.
The written undertakings are not the only demand eurozone finance ministers have made before they decide whether to approve a 130 billion euro (US$172 billion) bailout, part of which Athens must get if it is not to default chaotically when 14.5 billion euros in debt repayments fall due on March 20.
Weary of broken Greek promises, the eurozone ministers have also told Athens to say how it will fill a 325 million euro gap in its plan for an extra 3.3 billion euros in savings this year before they meet in Brussels today.
Government spokesman Pantelis Kapsis accepted that Athens had work to do.
“The Eurogroup on Wednesday will obviously be a tough one but the government believes the political leaders’ positions show we are determined to continue,” he said.
Greece had to seal the “Private Sector Involvement” (PSI) deal to reduce its debt burden. “The next three weeks will be hellish. The list of actions regarding the PSI and the memorandum is extremely pressing,” Kapsis said.
Terms of the PSI, under which private creditors will take a major cut in the value of their Greek government debt holdings, are set to be announced after the Eurogroup meeting, sources familiar with the talks said on Monday.
Greece’s creditors will take a net loss of 70 percent, two of the sources said.
Many Athens residents fear that Sunday night’s violence may lead to something like the riots in 2008, which spread across the country and lasted for weeks after police shot dead a 15-year-old schoolboy — or something yet worse.
“It is very likely that such protests will be repeated because people are very angry, they are outraged,” said Vassilis Korkidis, head of the Greek Commerce Confederation.
“People sent a message yesterday: Enough is enough! They can’t take it any more,” said Ilias Iliopoulos, general secretary of public sector union ADEDY. “The social explosion will come one way or another, there is nothing they can do about it any more.”