Greek opposition party rejects new austerity plan

Greece's main opposition leader bluntly refused Monday to back new austerity measures designed to tackle the crippling debt crisis, arguing they would only bring further recession, despite the European Union's insistence for cross-party support.

Top EU finance officials have argued that Greece, which is struggling to meet the terms of an international €110-billion (US$154 billion) bailout and could require more help, needs all its political parties to back the debt-cutting plans to ensure they can be implemented smoothly.

They have not said outright that receiving the next instalment of the bailout, due in late June, depends on a cross-party agreement, but have stressed the importance of opposition support.

Prime Minister George Papandreou was meeting the heads of opposition parties to seek consensus, a day after Greece announced extra measures to shrink its budget deficit, including more than €6 billion (US$8.4 billion) worth for this year and an immediate start to a previously announced €50 billion privatisation programme.

Measures this year range from increased taxes to cutting down on social security costs, while the midterm austerity program will run to 2015, two years beyond the current government's mandate.

Mistaken recipe

Antonis Samaras, head of the main opposition conservative party, who earlier this month called for a renegotiation of the bailout deal, argued the government's overall direction in dealing with the crisis was wrong.

"To this demonstrably mistaken recipe (of the bailout deal), I will not agree," Samaras said shortly after meeting with Papandreou.

Samaras has in the past backed certain measures, such as privatisations, but said ever-increasing taxes served only to push the country deeper into recession. He underlined his party's proposal for reducing taxes as a means of jump-starting the economy.

"The government lacks the courage to restart the economy and is not considering a renegotiation. It is repeating the same mistake, and exceeding the limits of the Greek economy and of our people," Samaras said. "We remain opposed."

- AP