The EU missed its target of aid to developing countries by $21.3bn in 2010 and future improvements seem unlikely.
|The protests, organised by a Facebook group called ‘The Indignant’, follow similar demonstrations in Spain. [Reuters]|
George Papandreou, the Greek prime minister, has failed to get opposition party leaders to back austerity measures but vowed to do whatever it takes to exit a debt crisis – even without their consent.
The EU warned Greece was running out of time but Papandreou said not all hope was lost in getting political backing for debt-cutting measures.
The same kind of consensus was achieved in Portugal and is required by Euro zone policymakers before Athens can receive more cash to stay afloat.
The government has a majority in parliament, but EU officials have demanded an agreement between the two largest parties to ensure that a bailout programme can run smoothly beyond the next general election, due in 2013.
Olli Rehn, the EU’s monetary affairs commissioner, said Friday’s cross-party talks in Athens must continue, despite the main opposition conservatives’ refusal to endorse more cutbacks.
The commissioner’s warning came after Greek conservative leader Antonis Samaras refused to bend to EU pressure after a three-hour crisis meeting involving the heads of all Greece’s major political parties.
Brussels is increasingly frustrated with the slow pace of structural reforms.
Papandreou has insisted he would serve his full term and continue to court opposition support amid growing investor fears that the barely-solvent country will not be able to fully repay its debts – expected to reach $513 billion this year.
Papandreou’s Socialists face increasing public hostility to pension and salary cuts imposed last year, together with increases in taxes and retirement ages.
Greece’s crisis took an ominous turn on Thursday, when Eurogroup chairman Jean-Claude Juncker reportedly said the IMF may have to hold back the next tranche, citing a strict interpretation of Fund rules.
Amid the uncertainty, the main stock index in Athens closed down 1.7 per cent on Friday.
Hunger for change
Thousands of demonstrators gathered in central Athens for the third day on Friday, to protest weakening economy.
Prompted by a Facebook campaign and chanting before parliament “Thieves! Thieves!”, the protesters, including families with their children, rallied in solidarity with their Spanish counterparts and called for people in France and Italy to join.
The Greek government began introducing reforms in 2010 to reduce a massive debt, which has shut it out from borrowing from the markets and plunged the country into a debt crisis.
The painful reforms have included wage and pension cuts, tax increases and job layoffs. The government announced more reforms this week which foresee job cuts but no wage reductions.
The public has supported measures by the government to end corruption and waste but are unhappy at the announcement of further measures. Protesters say they are angry that ordinary Greeks are being forced to pay for the crisis when “corrupt politicians are not being punished”.
The protest is one of the rare occasions when an anti-austerity rally has not been arranged by a political organisations or trade union. It has also avoided the violence which has often taken place during previous demonstrations.
The dissent began on Wednesday, May 25, with 15,000 people while 10,000 attended Thursday’s protest with demonstrations also taking place in other squares around the country.