“We are taking measures that would have been inconceivable a few months or a few years ago… . This is a very harsh but necessary way to prevent the real crisis, which would be a return to the situation we had in the 1960s or the 1950s.’’
Venizelos made the comments during a parliamentary debate ahead of a vote of confidence today in the country’s new coalition government.
The new government, headed by technocrat Lucas Papademos, a former vice president of the European Central Bank, was sworn in last week after days of a severe political crisis that brought the country’s continued participation in the European joint currency into question.
Rising borrowing costs for troubled eurozone countries hit markets across the continent yesterday, and sent shares on the Athens Stock Exchange tumbling 3.57 percent to close at 735.65.
Greece sold $1.8 billion yesterday in 13-week treasury bills, but will have to pay interest of 4.63 percent.
The new government will face an early gauge of public acceptance tomorrow when unions will join an annual march to mark the anniversary of an antidictatorship uprising in Greece in 1973. Fearing violence, some 7,000 police will be deployed in Athens that day.
As prime minister, Papademos has a delicate balancing act with his government, including ministers from the country’s two main - and usually ferociously opposed - parties, the socialists and conservatives. Cabinet posts were also handed to a small right-wing populist party.
Papademos will meet Monday with top EU executive officials Jose Manuel Barroso and Herman Van Rompuy, while Venizelos spoke on the telephone Monday to EU Monetary Affairs Commissioner Olli Rehn and Charles Dallara, who heads a global banking lobby group negotiating Greece’s debt reduction.
The new debt deal includes provisions for private bondholders to give up 50 percent, or some $135.29 billion of their Greek debt holdings.
Greece has been gripped by a vicious financial crisis for the past two years. In return for an initial $148.82 billion bailout agreed on in May 2010, the country imposed harsh spending cuts, including slashing pensions and salaries and increasing taxes.
