Demonstrators gather opposite the Parliament during a rally against the economic austerity and corruption in the Syntagma (Constitution) square in Athens on June 26, 2011.
Credit: Reuters/John KolesidisATHENS | Sun June 26, 2011 6 pm EDT
Athens (AFP) - the Prime Minister of Greece warned Sunday that rebel lawmakers can block certain reforms sought by the international donors but the Parliament would probably return an overall package of austerity this week to avoid sovereign default.
Despite rear warnings of policy of the European Union, conservative opposition of the Greece continues to defy the appeals for national unity to pass vital legislation, keep up the pressure on the Socialist Prime Minister George Papandreou.
Parliament is due to begin debating Monday program of increases in taxes and spending cuts 28 billion euros ($40 billion) over five years.
Papandreou needs the approval of Parliament this week to secure the payment of the next tranche of 12 billion euros of EU rescue and the IMF, vital if the Greece is to avoid becoming the first nation of eurozone default on its debt next month.
EU officials want to private creditors participate with a "voluntary" Greek debt rollover avoid a defect which would send shockwaves through the world financial system. A large part of the debt is held by French and German banks.
Sunday, a source of the France Bank, confirming a report in the daily Le Figaro, said that the Government of the France and the banks had agreed on a proposal of a barrel. Creditors would reinvest 70 percent of the proceeds of Greek debt, receive new bonds with actions and longer deadlines in a zero coupon funds.
Deputy Prime Minister Theodore Pangalos said newspaper El Mundo of the Spain, that it was optimistic to overcome the frustration of his party to win the first vote Wednesday, the tax and spending and create an agency for privatization targets.
"The package of measures of short and medium term with which we hope mainly to establish the framework for reform will be approved without difficulty," Pangalos told the newspaper in an interview.
It is more prudent to know if the Government could push through measures of a specific budget later, the day the legislation and the privatization of property of the specific State.
"This is where we can have problems." I don't know if some of our legislators will vote against it. "It is possible."
With the Greece unable to return to the international bond markets next year, as foreseen under the current program EU/IMF 110 billion euro, European leaders are working on a second rescue of a similar size plan, including a contribution of the private sector banks would agree to "voluntary" Greek debt reversal.
THE STREETS OF ANGER
Many Greeks who have lost their jobs or saw their real incomes decline by almost a fifth on the last two years reacted with anger at the prospect of new measures, that they say does not target the rich tax evaders and responsible for corrupt politicians to the spiral of debt of the Greece.
With Government lawmakers reluctant to support more austerity to public protests, party Papandreou PASOK has seen its slim majority reduced by five defections during the 13 months, leaving with 155 seats in the 300-member Parliament.
In a rare piece of good news for Papandreou, one of the two legislators PASOK, who announced they would vote against the package appeared to be faltering Sunday after discussions with the Finance Minister Evangelos Venizelos at the weekend.
"A moment I turns to a"no", the other towards a 'yes'." "I will make a last minute decision," Thomas Robopoulos told Reuters. A third socialist MP said that he will support the agreement only if Venizelos gives assurances on some measures.
Exert pressure on the Government, unions have called a national strike for two days from Tuesday. Many companies, including the main group of mob power which is scheduled for next year, a partial privatization began rolling cases.
Pangalos, who after a cabinet overhaul this month shares the title of the Prime Minister of his Deputy with Venizelos, believes that the conservative opposition would vote for certain measures.
But new democracy leader Antonis Samaras became a deaf ear to calls from home and abroad to support the package, saying that the painful measures would only deepen worst recession of the Greece in 37 years.
"You cannot ask for more taxes in a country already premium, in a market which has been sucked dry, with economic activity to zero and a huge recession," he said in a statement.
These days, European leaders added their voices to calls to the Greek Ministers to approve the measures and to avoid a default.
"The stability of the entire euro zone would be in danger and we must quickly ensure that the risk of contagion for the financial system and other countries in the euro area could be contained," the Minister of finance German Wolfgang Sch?uble said German Sunday newspaper Bild am Sonntag.
Venizelos, who took over the finance portfolio to the redesign of last week, has won the EU agreement and the IMF inspectors Thursday to additional measures that it hopes can put finance public back to maintain after that he did not meet the targets its international program.
The steps include a one-time solidarity levy on income, an increase in tax on heating fuels and the lowering of the allocation of non-taxable income to EUR 8 000 per year from 12,000.
Many Pacific nearly 1000 people gathered Sunday on the place Syntagma outside Parliament, which was protected by a line of riot police.
With unemployment of youth work to approximately 40 per cent, many of those who took the streets in protest or camped Syntagma in the last month are young people who fear the measures may aggravate their prospects dim economic.
"The choice is not between on the one hand to vote for the bankruptcy failed, but between economic and social growth and social cohesion, on the other, or measures", said the left-wing Coalition, a small opposition party, in a statement.
(Other reports by Tracy Rucinski in Madrid and James Regan in Paris.) (Editing by Peter Graff)
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