New austerity measures must be taken for the survival of debt-ridden Greece, Prime Minister George Papandreou said Friday, as negotiations on the details of a rescue plan with the International Monetary Fund and the European Union entered the final stretch, according to AP. The talks over what extra steps Athens must take as part of the rescue, which will provide ¤45 billion in loans this year and up to a reported ¤120 billion over several years, are expected to be completed over the weekend, possibly by Sunday. Once an agreement on further cuts is in place, Germany _ which would be the largest EU contributor to the aid package and has insisted on strict conditions for releasing the money _ is expected to quickly push the issue through parliament so funds can be approved before Greece faces a May 19 debt payment date. German Finance Ministry spokesman Michael Offer said Friday that it expected Athens to present the austerity plan by Sunday. He said once the plan is distributed, Germany will review it and then consult with eurozone finance ministers in a conference call expected to take place the same day. Germany has stressed it needs to review the Greek plan before it can move ahead with legislation deemed necessary to free up the ¤8.4 ($11.1) billion loan it is pitching in to help bail out Greece. «The measures we must take, which are economic measures, are necessary for the protection of our country. For our survival, for our future, So we can stand firmly on our feet,» Papandreou said in Parliament. «It is a patriotic duty to undertake this, with whatever political cost, which is tiny faced with the national cost of inaction ... and indecision,» he said. Indications that help will soon be approved for Greece has calmed markets. Greece's borrowing costs fell for the second day, with the interest rate gap, or spread, between Greek 10-year bonds and their benchmark German equivalent narrowing to 6.20 percentage points Friday, from a staggering 10 points Wednesday. Papandreou's government is already implementing a ¤4.8 billion austerity package that has trimmed civil servants' income, frozen pensions and hiked taxes which has already drawn the ire of labor unions. Union leaders who met with Papandreou Thursday to discuss the further measures said new cuts would be harsh. Ilias Iliopoulos, general secretary of Greece's public servants' union who attended the meeting, said he was told more sweeping cuts are expected through 2012, and that EU and IMF negotiators were pressing Athens to further increase consumer taxes, relax rules about layoffs, slash pensions, and extend pay cuts to the private sector. Unions already plan large weekend protests for Labor Day on May 1 and a general strike on May 5.
