Greeks panic as country on brink of financial abyss (News Feature)

By Christine Pirovolakis Apr 28, 2010, 13:26 GMT

Athens - The Greeks may curse their politicians and corrupt bureaucracy at times but they have always managed to maintain their optimism. That is, until now.

News that the country has reached the brink of financial abyss has raised the panic level for people on the streets, with the majority worrying about jobs, increased taxes and even the safety of their bank deposits.

'The country is ruined. What do we have to look forward to,' said Nikos Pendalidis, an environment ministry employee.

'I do not know if I will have a job left tomorrow, if I will ever receive a pension or even if my savings are safe in the bank.'

'It will be a miracle if we are still even allowed to remain in the euro (zone),' he added.

Greece's financial crisis worsened after Athens' credit rating was downgraded to junk status a day earlier, causing European shares to plunge amid renewed fears that the Greek crisis could spread to other eurozone member states.

The downgrade comes as Europe attempts to finalize the joint EU- International Monetary Fund 45-billion-euro (60 billion dollars) emergency line of credit for Greece, which has 8.5 billion euros of debt due on May 19.

Germany has come under increased presure to put aside it doubts over a bailout for Greece.

German Chancellor Angela Merkel will hold a crisis meeting in Berlin later Wednesday with European Central Bank President jean- Claude Trichet and IMF chief Dominique Strauss-Kahn about the growing crisis that is pounding global stocks and driving up borrowing costs for several eurozone countries.

Berlin has said that it will come to Greece's rescue, but faced with widespread German voter anger who oppose the bailout, Merkel is insisting that strict conditions be applied to any Greek bailout.

'Europe must act here and now,' ran the banner headline Wednesday of top-selling newspaper Ta Nea.

Conservative daily Kathimerini ran the headline 'It is now a race against time - fear is spreading in all of southern Europe,' while daily newspaper Ethnos' front page screamed 'Europe wakes up. Now we are all running.'

With the euro also falling against the dollar, EU President Herman Van Rompuy said leaders of all 16 eurozone nations would meet in Brussels around May 10 to try to agree a massive rescue operation.

Speaking in Tokyo, Van Rompuy said there was no question of Greece defaulting and insisted that talks were advancing to enable the country to tap up to 45 billion euros in loans form the EU and IMF.

Greece moved to stop speculators operating on the Athens Stock Exchange as the interest rate it has to pay to borrow money shot above 10 per cent.

'This is clearly a European situation now - that the problem is broader and concerns all countries and not just Greece,' said Greek government spokesman Giorgos Petalotis.

'We are doing everything necessary to overcome this difficult situation - we are taking the measures and decisions that have been asked of us.'

Many believe that while Greece will have enough money to avoid default in the coming weeks the future remains uncertain as the government will likely come up against increased social strife.

In a hint of what might be likely to come, Greece's General Accounting Office began re-circulating hundreds of commemorative drachma coins.

Greek media reported that EU and IMF officials, who are currently in talks with the country's finance ministry, had proposed further steps to slash public sector costs and boost competitiveness.

These include increasing the pension age to as high as 67, from a current average of around 62, and scrapping the system of two extra monthly salaries a year as bonuses.

The General Workers Confederation announced a general strike for May 5 against the new austerity meausres while Greek radio technicians launched a 48-hour strike on Wednesday, halting news broadcasts.

Earlier this week, hundreds of port workers blocked nearly 1,000 tourists at Pireaus harbour, delaying their cruise ship's departure by more than 12 hours.

A large majority of Greeks, 60.9 per cent, disapprove of their government's decision to turn to the EU and IMF for emergency aid, according to an opinion poll released Tuesday.