Greece Fighting to Secure Permanent Debt Solution

Greece is fighting to secure a permanent solution to its debt crisis, Prime Minister George Papandreou said Sunday, adding that the ruling Socialists have the strength to push through tough measures as Greek lawmakers get ready to vote on the next round of cutbacks. In an interview with newspaper Proto Thema, Mr. Papandreou said the target of an upcoming European Union summit will be to protect the country, adding that if EU members cannot solve their problems then the consequences for Europe will be unpredictable.

"The target of all our efforts is to protect the interests of the country and the interests of the vast majority of our citizens that would experience a real catastrophe if the country were to default," he said. "We are now fighting for a more permanent solution that will lift, to a large extent, uncertainty about the future of the country."

Mr. Papandreou's comments come after finance ministers from the Group of 20 industrialized and developing nations wound up meetings in Paris on Saturday to sketch the outlines of a package that will reduce Greece's debt load in a deal to be agreed by euro-zone leaders at their summit Oct. 23.

In July, euro-zone leaders agreed to a new €109 billion aid program for Greece to cover its financing needs for the next several years, but that deal has been effectively abandoned after Greece's finances significantly worsened amid a deeper than expected recession.

On Thursday, Greek lawmakers are expected to vote on the next round of tax hikes and spending cuts needed to meet 2011 and 2012 budget targets as promised to international creditors, amidst growing public opposition and internal dissent within the ruling socialist party.

Mr. Papandreou said the socialists will go it alone with their 154 seat majority in the 300-seat Parliament after failing to secure cross party cooperation over the measures.

"We have made our choices, we will continue to fight to save and change the country, we will continue alone for as long as needed," he said.

Despite a flurry of talks at an international level on helping solve Greece's debt crisis and ringfencing euro-zone countries from financial contagion, along with a harsh austerity program at home, Mr. Papandreou called on Greeks to be patient and not to expect any quick fix solutions.

"I would be the happiest man in the world if I could do that. But I cannot," he said.

source: Wall Street Journal

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