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Negative response to Greek debt measures

Negative response to Greek debt measures
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Greek Prime Minister George Papandreou’s proposed measures to slash the country’s debt have drawn an angry response from some workers, scepticism from economists and a thumbs down from the financial markets.

At a demonstration outside the Finance Ministry in Athens, Communist trade union leader Theodoros Georgiou said: “These measures will leave us without jobs, without insurance, without education, without healthcare, without civilisation. We have to respond to that, which is why we are here.”

The Communist unions called for a nationwide strike later this week.

The Greek prime minister proposed spending cuts, the introduction of a capital gains tax, the resumption of inheritance and property taxes abolished by the previous government and a 90 percent tax on private bankers’ bonuses.

But economists were critical and accused Papandreou of not being specific enough on how he intends to resolve the crisis.

Political analyst Giorgos Kyrtsos said a lot is at stake, but hopes are not high: “The structural problems of the Greek economy, the large public sector, corruption, tax evasion, all that is on the government’s agenda but we don’t know if they can produce any results because we have a history of promises without results. We need at least six months to implement the measures and eight to 12 months to see if they’re effective.”

On Tuesday, Papandreou met with leaders of all the country’s main political parties at the Presidential Palace in Athens to seek consensus on responses to the difficult economic situation

A continued sell off of Greek debt and bank shares indicated the financial markets feel more is needed such as cuts in public sector pay, welfare benefits or pensions.

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