GREECE’S PRIME minister told his cabinet yesterday that “default is not an option” and that an agreement struck with EU/IMF lenders for a second bailout of €130 billion, was “absolutely essential” to his country’s economic recovery.
Lucas Papademos’s comments came after his administration was thrown into crisis when the smallest party in his coalition, the Popular Orthodox Rally (Laos), withdrew its four ministers from his government and one socialist Pasok deputy minister resigned.
The resignations bring to six the number of ministers to quit in protest at the additional austerity measures demanded by the troika. About two dozen MPs from Pasok, the main coalition party, have also said they intended to vote against the agreement.
Despite the defections, Mr Papademos told an emergency sitting of his remaining cabinet he would “do everything necessary” to rescue the bailout deal.
“A disorderly default would put the country on a catastrophic course. It would lead to conditions of uncontrollable economic chaos and social explosion,” he warned.
At Thursday’s Eurogroup meeting, Greece was given until Wednesday to find another €325 million in spending cuts, in an unexpected move that shocked many Greeks, already reeling from two years of austerity.
The mood was reflected on the front pages of yesterday’s newspapers. “Constant blackmail by [German finance minister] Schaeuble” declared Eleftheros Typos, while Ta Nea reported that Greeks felt they were being pushed back 50 years in terms of development.
Announcing he could not vote for the agreement, Laos leader Giorgos Karatzaferis said the negotiations with the troika and the negative response to the deal from Greece’s euro zone partners had humiliated him.
“They have stolen our pride. I cannot tolerate this. I cannot allow it, even if I have to starve,” he told a press conference.
“We don’t want to leave the EU, of course, but we can get by without being under the German jackboot,” he added.
The dramatic political developments came on the first day of a 48-hour general strike called by private- and public-sector unions.
Small-scale rioting broke out in central Athens when black-masked protesters threw petrol bombs and other missiles at police, who responded with teargas. Mass protests are expected tomorrow, when MPs will vote on the austerity deal.