Europe warns Greece: stick to austerity plan or loans stop

4th May 2010, Comments 0 comments

Greece must adhere strictly to its austerity programme or risk having loans withdrawn, Germany's finance minister warned Tuesday, as signs of frustration with large-scale protests in Athens grew.

"Every three months, Greece's government must give a comprehensive report to the European Commission and the IMF (International Monetary Fund) about how it is implementing its plan," Wolfgang Schaeuble told the Rheinische Post daily.

"If there are any violations, payments will be stopped. Then Athens will once again be threatened with bankruptcy," he added.

Schaeuble was speaking a day after Chancellor Angela Merkel's cabinet approved its slice of a 110-billion-euro (145-billion-dollar) three-year loan package for ailing Greece.

Berlin agreed to stump up some 22.4 billion euros over the three-year period, with 8.4 billion euros this year.

In Austria, Finance Minister Josef Proell said that Europe was losing patience with Greece, as a new wave of protests against government austerity measures in Athens loomed.

"Regarding the protests in Greece, I, along with the rest of Europe, am near the end of my tether," Proell said late Monday.

He also noted the aid would be dependent on Greece carrying out its promises, adding it "will be dished out step by step, when (austerity) measures have been carried out."

"A new European policy (is needed) when dealing with such states," he said, calling for better budget controls at the EU level.

In Slovakia, Prime Minister Robert Fico insisted that his government would not consider providing its share of some 800 million euros of rescue money to Greece unless Athens began to cut welfare spending.

"We can't give Greece any loan before we see them doing their homework," Fico told reporters.

France's Finance Minister Christine Lagarde has also reserved harsh words for Athens, telling Le Monde newspaper Monday that Spain and Portugal were not in the same boat as Greece because they "did not provide false figures, talk nonsense over their deficits."

The Greek government has vowed a series of punishing budget cuts and tax increases in exchange for the unprecedented joint EU-IMF bailout agreed on Sunday.

But the measures have run up against fierce opposition at home, with demonstrators staging a protest on the Acropolis Tuesday and civil servants kicking off a two-day walkout.

Pensioners were also holding a separate demonstration while a full-blown general strike has been called for Wednesday to protest the unpopular wage cuts and tax rises.

The bailout is also hugely unpopular in Germany, where a key regional election takes place on Sunday that could see Merkel's coalition lose control of the upper house of parliament.

On Tuesday, Germany's most widely-read paper, Bild, launched a scathing attack on the decision.

"Why are our politicians breaking the EU Treaty?" the paper screamed on its front page, printing a copy of article 125 of the Lisbon Treaty which forbids one member state from assuming the liabilities of another.

Inside, the paper urged its readers to send a letter to their member of parliament to demand they contribute personally to the Greek bailout with their annual salary.

Germany's portion of the package must now be approved in a parliamentary vote on Friday.

© 2010 AFP

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