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Eurozone finmins to confer over Greece rescue

30 April 2010 14:21 (UTC +04:00)

Greece is preparing severe austerity measures to secure the bailout of up to 120 billion euros, which investors hope will stop the debt crisis from sinking other fragile EU countries, but faces a battle with unions angered by the scale of cutbacks.

Union officials said the International Monetary Fund asked Athens to cut the deficit by 10 percent -- roughly 24 billion euros -- by raising sales taxes, scrapping bonuses amounting to two extra months pay in the public sector, and accepting a three-year pay freeze. They have called a series of strikes in the days ahead.

But Greek Prime Minister George Papandreou said the measures were vital to securing aid.

Many talk about red lines. The only red line is the country’s interest. Today the top priority is the survival of the nation. This is the red line, Papandreou told parliament.

"The measures we must take, which are economic measures, are necessary for our country’s protection, for our future, for us to be able to stand on our feet."

German politicians have said the aid package could be worth 100-120 billion euros ($133-160 billion) over three years, against an original plan for 45 billion euros of aid in 2010.

France’s Economy Minister Christine Lagarde told Reuters she hoped solutions for the Greek crisis would be found before a euro zone summit announced for May 10.

"The work is in progress and it looks good," Lagarde said. "We are really working on the essentials to arrive at a solution as quickly as possible."