Greek PM doubts imminent solution to debt crisis

Greek Prime Minister George Papandreou expressed "serious doubts" on Friday that a solution to the Greek debt crisis could be reached during the coming EU summit in Brussels on Sunday. A day after the Greek parliament approved a new package of measures promoted by the government as a prerequisite for the release of further funding from EU and IMF lenders to stave off default next month, Papandreou flied to Brussels to negotiate an improved version of the July 21 agreement over a second bailout package. In a message on Twitter, the Greek Prime Minister outlined the main targets of his trip, expressing "serious doubt" over a possible solution coming out this Sunday. First of all, Greece should remain a member of the eurozone, he stressed, adding that the government is committed to implementing decisions made on July 21. Furthermore, the debt-laden country seeks to ease the debt burden and at the same time secure changes that safeguard the stability of the banking system, insurance funds and liquidity for real economy. Finally, Athens aims at a solution that will boost development in Greece and across Europe, Papandreou underlined. However, as the Greek leader preparing for the crucial summit, opposition parties, labor unions and governing socialist party members in Greece stepped up pressure on his administration. Following a 48-hour nationwide general strike on Wednesday and Thursday that paralysed the country in protest of the austerity bill that cleared the assembly on Thursday evening, the two main unions of public and private sector employees ADEDY and GSEE warned Friday with more strikes in coming days. "The struggle goes on," chanted civil servants who marched in front of the parliament in the center of Athens on Friday, as their colleagues continued a two-week sit-in at ministries. They protested the approval of the bill and the death of a 53-year old peaceful demonstrator of heart failure during a mass rally on the same spot that turned violent on Thursday afternoon with clashes between hooded rioters and police. Municipal employees, including garbage collectors, who were on a three- week mobilization that has left tons of rubbish uncollected rotting across Athens, staged a fresh 24-hour strike on Friday. At the same time, unionists of dockworkers announced an extension of a week-long strike until Tuesday. In a meeting with Greek President Karolos Papoulias on Friday, main opposition New Democracy party leader Antonis Samaras insisted on a different recipe to counter recession and exit the crisis, showing that there is still no "common ground" with the government. In another show of mounting pressure for the government, an increasing number of PASOK deputies called on Papandreou to undertake "political initiatives" as soon as next week to build wider consensus and counter the crisis. Some 28 lawmakers signed a joint statement calling for a "national plan to exit the crisis", starting from a fair and balanced new taxation system ahead of the debate of a relevant bill in the assembly next week. Party "dissidents" urged for immediate moves, including new efforts to form a coalition government or snap general elections. "We need other solutions, such as elections or a referendum, otherwise we are heading towards default. There should be a national unity government," said lawmaker Dimitris Kremastinos. "Time runs out. Society is sinking in despair, the country collapses," added Vasso Papandreou, warning that Thursday's parliamentary vote was the last time she approved new austerity measures. Another "rebel", former Labor Minister Louka Katseli, who voted against the austerity bill arguing that the new tax hikes, further salary cuts and suspension of collective labor contracts will fuel recession, was expelled from PASOK's parliamentary group on Thursday. The move left the party with a three-seat majority in the 300-member assembly. In June 2010 ahead of a similar crucial austerity vote, Papandreou had told a cabinet meeting that if the government's majority was ever reduced to 153 seats, he would consider early elections. Government spokesman Elias Mossialos in statements to local media on Friday played down the whole discussion, stressing that the focus at the moment is on negotiations with European partners over a solution to the debt problem. Greece narrowly escaped default in May 2010 securing the first EU/IMF bailout package in exchange of austerity and structural reforms.