Athens, May 18: Greece has been battling to avoid default for months while caught in the midst of a recession. Greece received a vital 14.5-billion-euro ($17.9-billion) bailout loan from the European Union , just hours before the country is scheduled to pay a 9-billion-euro bond which matures on Wednesday
Economists have expressed concern that the Greek economy may plunge
even deeper into recession due to its drastic belt-tightening measures.
The 14.5-billion-euro loan instalment from the European Union
is part of a larger 110-billion-euro package from the EU and the
International Monetary Fund.
Athens has said it could not pay off its maturing debt without the
emergency loans and that the rescue package is vital for Greece to
avoid defaulting on its debt and plunging the shared euro into crisis.
Greece drew the first package funds from the IMF, totalling 5.5 billion
euros, last week. The next tranche of funds from the IMF and the EU will
arrive in August. The global equity markets have tumbled over the last few weeks on fears that Greece`s debt problems could halt the global economic recovery
In exchange for the loans, the Socialist government under the leadership
of George Papandreou has had to pass a series of austerity measures –
which include salary rollbacks, pension cuts and consumer tax hikes –
and cracking down on corruption and tax evasion.
In what is seen as a blow to the credibility of Papandreou’s government,
Greece’s tourism minister resigned Monday after tax officials said her
husband, a popular singer, owed the government more than 5 million euros in unpaid taxes.
Tourism Minister Angela Gerekou handed in her resignation hours after
press reports, which were later confirmed by the Finance Ministry,
revealed her husband, Tolis Voskopoulos, faces criminal prosecution
for unpaid taxes and fines.
The debt crisis and subsequent public spending cuts and tax hikes have sparked protests and riots in Greece, leaving three people dead when a bank was firebombed earlier this month.
European Union policymakers and investors are closely monitoring public reaction amid concerns that large scale social unrest could prevent the government from pushing through the measures.
The austerity programme has put the government up against the country’s largest unions, which have so far staged three strikes in protest and are planning a fourth May 20.
The latest walkout is expected to disrupt sea and rail travel, and shut down ministries across the country.
A poll published Sunday in the Ethnocs newspaper found that most Greeks – 58.8 percent – believe their country will be able to avoid going bankrupt, while 36.6 percent considered default inevitable.
Of the 1,028 people polled, 56.2 percent considered the austerity measures to be necessary. However, 87.8 percent judged them to be unfair.
—Agencies