Athens News Agency: News in English, 10-05-02

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From: The Athens News Agency at <http://www.ana.gr/>

CONTENTS

[01] FinMin: Gov't chose to save the country

[02] PM Papandreou: Big feat ahead

[01] FinMin: Gov't chose to save the country

Speaking after an emergency Inner Cabinet meeting and just before his departure for Brussels where eurozone finance ministers were to hold an extraordinary meeting to finalize the EU support package for the Greek economy, Papaconstantinou stressed that to the dilemma of collapse or bankruptcy, the government chose to save the country.

Among measures announced by the minister were an increase in the VAT coefficients from 21 to 23 percent, from 10 to 11 percent and from 5 to 5.5 percent, a 10 percent increase in consumption taxes on fuel, cigarettes, alcohol and luxury taxes, an extraordinary contribution by profit-making enterprises, increases in the objective values of real estate, and taxation of unlicenced buildings.

He further announced a drastic reduction of the so-called 13th and 14th salaries for civil servants and in both public and private sector pensions, additional 8 percent cuts in cvil servants' benefits, reductions in large pensions, and a 3-year salary and pension freeze.

[02] PM Papandreou: Big feat ahead

He added his optimism that the country will succeed in this effort despite the immense difficulties, noting that the Greeks have always emerged from difficulties stronger and a victor, while also expressing his total confidence in the forces of Hellenism.

"If we all work together, we will succeed," the premier stressed, as European Commission president Jose Manuel Barroso announced in a written statement released in Brussels that the conditions have been met for responding positively to Greece's request for activation of the support mechanism.

"The Commission considers that the conditions for responding positively to the request by the Greek government are met and recommends that the coordinated European mechanism for assistance to Greece be activated," Barroso said in his written statement, stressing that the cutbacks in spending and reforms Greece has set in motion "constitute a solid and credible package", and thus the support mechanism loans will be decisive in helping Greece put its economy back on track and preserve the euro area's stability.

In a dramatic presentation of the state of the economy and the country, Papandreou stressed that he and his government do not promise easy and painless steps.

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