Greece rushes to slash budget

Updated: 2012-02-15 08:01

(China Daily)

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Greece rushes to slash budget

People walk past a burned-out shop after Sunday's night violent protests which followed the Greek parliament approval of a deeply unpopular austerity bill in Athens on Tuesday. [Yiorgos Karahalis / Reuters]

ATHENS, Greece - The Greek government rushed on Tuesday to wring out another 325 million euros ($ 429 million) in budget cuts to satisfy eurozone finance ministers mulling whether to sign off on a rescue package to save the country from a chaotic default.

Squeezed between sceptical European capitals and deep anger in Greece, political leaders must also produce written commitments to stick to the terms of the 130 billion euro ($172 billion) bailout before the ministers meet on Wednesday.

A government official said the cabinet already had a proposal on the table and that Prime Minister Lucas Papademos would chair a session of the government.

"There is a specific proposal by the government for the 325 million euros to be submitted to the Eurogroup tomorrow," said the official, who declined to be named.

A second government source said: "The government will have a solution before the Eurogroup (meeting of eurozone finance ministers)."

Greek lawmakers endorsed another 3.3 billion euros in cuts in wages, pensions and jobs on Sunday despite unrest on the streets of the capital, Athens.

The violence was the worst in years, with dozens of buildings set ablaze, damaged or looted.

But the bill left unexplained 325 million euros of cuts that the European Union and International Monetary Fund now want clarified before they sign off on the bailout.

There was no immediate sign that political leaders would put pen to paper to guarantee they will implement the terms of the bailout before and after an election expected in April.

Antonis Samaras, leader of the conservative New Democracy party and a member of the coalition, has taken a harder line on the austerity measures than others in the coalition.

He is the front-runner to become prime minister in April, and while he voted 'Yes' in parliament on Sunday and expelled from the party a quarter of his deputies for rebelling, Samaras indicated he would try to renegotiate the terms of the bailout.

There is growing doubt among Greece's foreign lenders that the country - threatened by deepening social turmoil - is willing to and capable of seeing through a second round of punishing austerity since 2010.