Greek PM Warns Parliament To Approve Budget Cuts Or Face 'Vortex Of Recession'
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Prime Minister Lucas Papademos addressing parliament, November 2011. (Wikimedia Commons)
During a televised address, Papademos said the 3.3 billion euros in cuts to wages, pensions and jobs were worth the 130 billion-euro bailout from the European Union and International Monetary Fund.
According to Reuters, parliament was uncomfortable with the drastic cuts and was showing signs of a "small rebellion." The prime minister strived to rally their support and ease their concerns to some degree by warning them of the disastrous alternative.
From Reuters:
Papademos said parliament had a historic responsibility to back the bill, or face catastrophic consequences if Greece misses a March 20 deadline to service its debt.
"A disorderly default would set the country on a disastrous adventure," he said. "It would create conditions of uncontrolled economic chaos and social explosion."
"The country would be drawn into a vortex of recession, instability, unemployment and protracted misery and this would sooner or later lead the country out of the euro."
Parliament's finance committee approved the bill on Saturday, and a full vote in the chamber is expected late on Sunday.
The Papademos coalition has a huge majority, which should ensure parliament approves the package needed to secure Greece's second bailout since 2010.
But the number of dissenters is growing.
About 20 MPs belonging to the two major parties backing Papademos shrugged off threats from party leaders and warned they might reject the bailout. It would take more than 80 rebels to scupper the law.
Six members of the Papademos cabinet have already resigned.
Failing to make the expected 14.5 billion euros in debt repayments due next month would result in the country losing its banking system and getting "cut off from imports of raw materials, pharmaceuticals, fuel, basic foodstuffs and technology," according to Deputy Finance Minister Filippos Schinidis.
Greece must approve the deal Sunday to meet a Feb. 17 deadline to submit a debt deal to its private-sector bondholders and explain to the eurozone how it will cut 325 million euros in this year's budget. Then and only then will the country receive bailout funds.
