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Greece debates new austerity plan

Tuesday, June 28, 2011 - 02:24

June 27 - The Greek parliament begins to debate the country's new five-year economic plan, which it must approve for Athens to receive its next installment of EU IMF aid and avoid defaulting on its debt. Joanna Partridge reports.

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Greek protesters bring their message to their country's best-known monument, the Acropolis. Unions and workers are planning fresh strikes and protests as the government tries to pass another wave of austerity measures. Polls show that three-quarters of Greece's population of 11 million oppose the new five-year plan of tax rises, spending cuts and state sell-offs. Parliament is debating the package ahead of a crucial vote later in the week. EU leaders have called for national unity, but the conservative opposition is against the measures. Prime Minister George Papandreou will have to rely on his slim parliamentary majority to push through the package. If parliament doesn't approve the measures - the results could be disastrous - as Greece wouldn't get the fifth installment of its financial aid from the EU and IMF - and could become the first euro zone country to default. French President Nicolas Sarkozy said French banks have agreed to roll over holdings of Greek debt for 30 years - but said no country should leave the euro. SOUNDBITE: French President Nicolas Sarkozy, saying (English): "It's madness. It's completely without sense. Why? Because let me remind you that France is committed to a debt of 1,500 billion euros. Denominated in euros. If France, or any other country leaves the euro, it's currency will devalue. But the debt that is owed remains denominated in euros. So the exit from the euro would amount to doubling or tripling the debts of the country that is leaving the euro." The financial markets are also closely watching the Greek crisis. Jens Larsen, Chief European Economist at RBC Capital Markets says it's important that Greece passes the new measures SOUNDBITE: Jens Larsen, Chief European Economist, RBC Capital Markets, saying (English): "The first step is a longer term IMF programme that will be renewed, more funding will be put in place that will take Greece out of the market for the next three years, but I think there is also now clearly a look not just at how the private sector is going to be involved in the current solution, but also longer term how we can restructure Greece's debt without causing another financial crisis." Analysts are quietly optimistic that Greece's parliament will pass the new austerity package - but say it's important to look much further into the future - so Greece can take control of its debt, and get the economy growing again. Joanna Partridge, Reuters

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Greece debates new austerity plan

Tuesday, June 28, 2011 - 02:24