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Greece starts austerity push despite angry people and politicians

Greece starts austerity push despite angry people and politicians
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Greek Prime Minister George Papandreou gathered his cabinet for a pep rally on Monday, trying to persuade them to back yet more austerity measures.

Papandreou held the informal meeting with his ministers in the face of increasing public anger over cutbacks, corruption and economic mismanagement and a possible revolt within his own party.

To get a new international bailout, Papandreou is having to commit his country to years of austerity.

And some economists feel that right now Greece is just running to stand still and needs a long term plan.

Robert Halver of Baader Bank in Frankfurt said: “We have just ‘time gaining’ measures now. We need a business plan for Greece in the next couple of years and I guess agriculture, tourism, solar energy and an export hub for the Middle East could be the best business case for Greece in the next couple of years. To pump even more money into Greece is no solution.”

Papandreou has to get the latest measures approved by the political council of his party, the cabinet and then parliament.

If he doesn’t Greece’s finances start to unravel and that would have a big impact on banks throughout Europe – particularly in Germany and France.

The latest bank lending data show that German and French banks held over two thirds of Greek government bonds that were in international lenders’ hands at the end of last year.