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Greek president warns "pain-for-aid" must be fair

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Greek president warns "pain-for-aid" must be fair
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When Prime Minister George Papandreou met Greek President Karolos Papoulias to explain the so-called “pain-for-aid” deal with the EU and the IMF, the president warned him it would be difficult to get popular support unless workers’ suffering was accompanied by a crackdown on corruption.

After that meeting Papandreou insisted the new measures are vital for Greece’s financial survival. He said: “This is an opportunity to make a better country, to make a new beginning, a more just, transparent, human, productive and competitive Greece.”

Under the deal announced at the weekend euro zone members and the IMF will lend Athens 110 billion euros over three years.

It is the first rescue of a euro zone member and by far the largest bailout for a country to date.

Greece got further help from the European Central Bank which has said it would accept all Greek government bonds as security for loans, even if their credit rating continues to fall.

The move would guarantee Greek banks can continue to borrow money from the ECB at a cheaper rate.

The austerity measures include abolishing Christmas, Easter and summer holiday bonuses for higher paid workers in the public sector and limiting them for lower earners.

Value added tax will rise from 22 percent to 23 percent and taxes on fuel, alcohol and tobacco will go up by 10 percent.

Angry Greek unions accusing the government of breaking a pledge not to impose any further cuts after previous austerity measures in March.

The main public sector union said it would hold a two-day strike this week instead of its previously planned one-day walkout.

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