Papandreou announces "unprecedented" bailout
Issued on: Modified:
Prime Minister George Papandreou told Greeks that they face "big sacrifices" in a televised address to his cabinet but said that the amount of the bailout package agreed with the European Union (EU) and the International Monetary Fund (IMF) is "without precedent".
Greek Finance Minister George Papaconstantinou announced Sunday morning that the budget cuts will total 30 billion euros.
After Papandreou's speech, the European Commission recommended that the EU's aid mechanism for Greece be activated, saying that the package will be "decisive" for the eurozone's stability.
According to French Finance Minister Christine Lagarde, the rescue loans could total between 100 billion and 120 billion euros over three years. The amount will not be officially announced until an extraordinary meeting of eurozone finance ministers on Sunday afternoon.
Papandreou said that active and retired public-sector workers will bear the brunt of new budget cuts imposed by the EU and the IMF.
"The sacrifices are hard but necessary," he said. "Without them Greece would be in bankruptcy."
The announcement follows May Day protests by an estimated 15,000 people in Athens, as opinion polls show 70 per cent opposition to the IMF intervention.
"To his advantage, Papandreou is not considered responsible for the present crisis," comments Amélie Pinssot, RFI French service's correspondent in Athens. "But the plan completely contradicts the electoral promises of his party, which calls itself Socialist.
"It remains to be seen if the the government will be as effective in fighting corruption and tax evasion because, at the moment, the Greek middle class have a deep feeling of social injustice.