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          Papandreou says to save Greece

          Updated: 2011-09-11 09:48

          (Agencies)

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          Papandreou says to save Greece

          Greece's Prime Minister George Papandreou addresses the audience at the International Trade fair of Thessaloniki in northern Greece September 10, 2011.[Photo/Agencies]

          THESSALONIKI, Greece - Greek Prime Minister George Papandreou said on Saturday he would do whatever it takes to rescue his country from bankruptcy and stay in the euro zone, as doubts in Europe grew over its membership in the bloc.

          Sending a message to international lenders increasingly frustrated with delays in reforms and missed fiscal targets, Papandreou said his government was determined to take the difficult decisions and make the sacrifices needed.

          Papandreou says to save Greece
          "We decided to fight the battle to avoid a disaster for the country and its people and to stay in the euro," he said in his annual economic speech at a trade fair in the northern city of Thessaloniki. "Any delay and wavering is dangerous for the country."

          Anger at the country's failure to meet fiscal targets under its EU/IMF bailout has reached boiling point, prompting senior euro zone policymakers to cast doubt on its ability to avoid default or even its membership in the single currency.  

          The embattled premier, who was heckled by angry labour unions on Friday, said he would redouble efforts to fight endemic tax evasion, a main hurdle in achieving fiscal targets.

          His Finance Minister Evangelos Venizelos said earlier Greece may even take additional fiscal measures in 2011 to make up for budget deficit slippage that threatens the disbursement of an 8 billion euro EU/IMF loan tranche.

          Venizelos pledged to further cut the civil service payroll, push privatisations and deepen labour market reforms.

          Civil servants, who have seen about a fifth of their wages slashed, will suffer more after the government decided to put thousands of them in a so-called "Labour Reserve", in which they will draw 60 percent of their salary and possibly face dismissal if they find no other public sector job within a year.

          But austerity measures are throwing the economy into an ever deeper recession. GDP will shrink by more than 5 percent this year, Venizelos said, topping earlier projections in its third straight year of contraction.

             

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