Greek debt crisis: protests renewed over reshuffle status quo

The prime minister, George Papandreou, reshuffles cabinet but vows to push on with deeply unpopular austerity measures Thousands of Greeks have marched on parliament in a show of renewed public anger after the prime minister, George Papandreou, reshuffled his cabinet and vowed to push on with deeply unpopular austerity measures. In a move aimed at stifling dissent in his Socialist party, Papandreou on Friday dismissed his finance minister, George Papaconstantinou, who masterminded the five-year austerity programme that has sparked weeks of protests. The reshuffle coincided with a pledge by France and Germany to continue funding Athens, a move that may have bought Greece and its fellow euro zone members time to prevent a messy default, even if doubts over its longer-term solvency persist. The European Union and International Monetary Fund have made the reforms a condition for a new bailout package worth an estimated €120bn ($170bn) that Greece, shut out of capital markets, will need to fund itself through 2014. Around 5,000 protesters from the Communist group Pame marched into Athens’ central Syntagma square, where demonstrations turned violent earlier this week, chanting “the measures are killing us!”. French activists also performed with a 3m puppet depicting a bloodied figure of Lady Justice to rhythmic drumming in a gesture of solidarity with Greek protesters who have camped in the square for three weeks. “What has changed with the reshuffle? Nothing,” said Costas, a 22-year-old student who has been camping on the square since the beginning of the month. “We are not planning to leave unless they take back the measures.” Papandreou appeared to curb a revolt in his party by including some of the austerity package’s harshest critics in the new administration, but that might also weaken the reforms. He named political heavyweight Evangelos Venizelos, his biggest party rival, as finance minister. Shortly after his nomination, Venizelos said he would travel to Brussels on Sunday to ask lenders to allow some “improvements … for social justice” in the reform package. On the same day, euro zone finance ministers are expected to agree to release a 12 billion euro tranche of an existing, year-old bailout loan that Greece needs to pay back debt maturing in July and August and avoid default. “They’ve bought themselves time until September,” said Howard Wheeldon, strategist at BCG Capital Partners in London. “Germany and France are the main countries involved here, and neither of them are going to let the euro fail, and they’re not going to let Greece fail.” Luxembourg’s Jean-Claude Juncker, the chairman of the euro zone finance ministers’ Eurogroup, criticised German pressure to involve bondholders, telling a German newspaper this has pushed up the cost of the bailout. Successful negotiations over a new aid package for Greece are vital to the economic health of the euro zone, Juncker said. “We are playing with fire,” he said, adding that in the worst case, ratings agencies could declare a default leading to dire consequences for the currency union. Papandreou’s new cabinet is expected to survive a parliamentary confidence vote on Tuesday night, and then approve a package which envisages €28bn in tax hikes and spending cuts by 2015. But Greek media were less certain about implementation, an issue that dogged Venizelos’s predecessor when he struggled to meet deficit targets agreed with Greece’s bailout lenders. “Greece needs a strong government. But does it need a strong government to finally implement what has been agreed with the EU or to break these deals?,” columnist Yiorgos Karipidis wrote in main Greek financial daily Imerisia. Greece Europe Euro European Union Economics European debt crisis European banks guardian.co.uk

Posted by on June 18, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.