May 25, 2011 / 1:53 PM / 8 years ago

Greek PM seeks consensus, no referendum planned

ATHENS (Reuters) - Greece’s government sought consensus on Wednesday for tough measures to exit the debt crisis and ruled out a referendum, while the EU Fisheries Commissioner warned her country’s euro membership was at risk.

Athens wants to secure continued funding under a 110 billion euro ($155 billion) bailout agreed a year ago while paymasters at the European Union press for wider political support before they agree on further loans to plug a funding gap next year.

Greek newspapers reported on Wednesday the government was considering a referendum on the additional austerity measures after its political opponents disagreed on the road ahead.

“There is no specific thought or any specific planning for a referendum,” government spokesman George Petalotis told reporters. “Our main concern is to complete our mid-term plan which is the immediate step to exit the crisis.”

Athens kick-started a stalled privatization program on Monday and promised tougher austerity measures and tax hikes to meet EU/IMF conditions for the release of a 12 billion euro loan tranche in June, vital to keep Greece from defaulting.

But the leader of the conservative opposition, Antonis Samaras, rejected the new package of fiscal measures, rebuffing a key condition for extra European Union financial assistance — cross-party consensus to support reforms.

Fisheries Commissioner Maria Damanaki, appointed by Greece’s ruling socialists, said Greece’s biggest postwar achievement, joining the euro, was at risk.

“I am forced to speak openly,” Damanaki was quoted as saying in a statement by the semi-official Athens News Agency. “Either we agree with our lenders to a program of tough sacrifices ... or we return to the drachma.”

Earlier, Prime Minister George Papandreou told Greece’s president he was open to discussing ways to exit the debt crisis and that a national consensus on the way forward was necessary.

“At this critical hour we need national consensus. I am open to all good ideas and realistic proposals,” he told reporters after meeting President Karolos Papoulias.

He said he was determined to keep the country in the euro zone, where the crisis, sparked by Greece’s admissions in 2009 that its deficit was much bigger than previously thought, spread to engulf Ireland and Portugal and may yet go further.

Papandreou, whose socialists have a comfortable lead in parliament but are sliding in opinion polls, has called on the political opposition to agree on the basics to emerge from the financing crisis but failed to get them on board.


On Monday, the government unveiled privatizations, part of a goal to raise 50 billion euros by 2015 to pay down its debt mountain, starting with divestments in Hellenic Postbank, OTE Telecom and the two biggest ports.

It said it was working with IMF/EU inspectors on finalizing extra fiscal measures worth 6.4 billion euros as part of a mid-term plan aimed at continued funding and meeting deficit reduction targets.

The troika team of inspectors resumed its meetings with ministers before concluding a fourth review of Greece’s economic adjustment program, which will determine whether Athens gets a fifth 12 billion euro tranche of bailout money.

One obstacle to the fifth disbursement of the loan is the IMF’s refusal to release its share of the money next month unless the euro zone commits on new aid for Athens to fill a 27 billion euro funding gap next year.

But the partners have made clear that no new aid on top of the 110 billion euros bailout Greece secured last year can flow until Athens delivers on new austerity and privatization pledges and shows it has broad support for them.

Greek labor ministry officials said on Wednesday the euro zone must resolve the rift in views and secure additional funding for the country.

“This is a condition for the disbursement of the fifth tranche of the bailout loan, which for us must take place by July 15. The total funding for 2012 needs to be secured,” the officials told Reuters.

Additional reporting by Renee Maltezou, editing by Mike Peacock

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