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Greece to debate austerity package under EU pressure
Date 27/06/2011 15:00  Author webmaster  Hits 1155  Language Global
27 JUN 2011

By Daniel Flynn and Harry Papachristou

(Reuters) - A Greek minister warned on Monday of "catastrophe" if parliament blocked a 28 billion-euro ($40 billion) package of tax increases and spending cuts after signs of revolt by some deputies in the ruling PASOK party.

Greece's conservative opposition has rejected EU leaders' calls for national unity, forcing Prime Minister George Papandreou to rely on his slim parliamentary majority to push through the package.

Without approval for the measures, the European Union and International Monetary Fund say they will not disburse the fifth tranche of Greece's 110 billion-euro bailout program.

Athens needs the 12 billion euros to pay its bills next month and avert the euro zone's first sovereign default, which would send shockwaves through a jittery global financial system.

"I believe (the austerity plan) will pass. There are concerns, there is anguish, but above all there is common ground among PASOK's parliamentary group to assume a common responsibility," Defense Minister Panos Beglitis told Skai TV.

"Voting against the plan would lead the country into big difficulties the next day, bankruptcy and default," he said, warning that fresh elections, which would inevitably follow a defeat in parliament, would be a "catastrophe" for Greece.

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