Ahead of a key EU summit, Commission President José Manuel Barroso exposed at length the panoply of measures to put cash-strapped Greece back on track, but mass protests in Athens and other cities clearly indicate that “nobody in the country believes Barrroso,” EurActiv Greece reported.
A day after violent clashes in Athens, tens of thousands of demonstrators rallied in front of the Greek parliament today (20 October) against a deeply unpopular austerity law.
Deputies are expected to pass the plan later today, as required by the EU and the International Monetary Fund (IMF). The bill passed a first vote yesterday.
The government has a majority of 154 seats in the 300-member parliament, but defections could possibly embarrass Athens, as it struggles to convince international lenders to maintain their support.
Speaking to the Brussels press, Barroso said on Wednesday that the EU-IMF programme for Greece can succeed. “My message is the following: It can work. It can work,” he repeated.
Barroso gave the example of Latvia, which was under severe financial strain in 2009 and the situation led to popular unrest. After the country had been bailed out by an IMF-led programme to the tune of €7.5 billion, Latvia has recovered and now enjoys a 4% GDP growth forecast.
The President of the European Commission also said that Greece has at its disposal €15 billion of structural funds that could be used under conditions made easier by the EU executive. Greece has one of the lowest absorption rates of structural funds, he reminded.
“We are proposing to member states to use the structural funds as guarantees to banks loaning to the economy, because in Greece, apart from the difficult situation of the state budget, there is a kind of limitation in terms of the credit flowing to the economy,” Barroso said.
With regard to tax collection, an area where Greece appears to have completely failed over the years, Barroso said he has been asked by the Greek prime minister, George Papandreou, that the Commission is offering its help in that area.
“I have created a task force chaired by [Horst Reichenbach], a former director-general of the Commission, vice-president of the EBRD, and they are doing very good work. That’s the message I’ve also got from the Greek authorities: to try to front load structural funds,” Barroso said.
EurActiv Greece reported, however, that the situation had reached “a dead end” and that “nobody in Greece” believed Barroso.
According to EurActiv Greece reports, the measures proposed may have worked in other countries but will fail in Greece, where the society is crumbling under the austerity measures and increased taxation. The country is disheartened by the “total lack of development plans” and “nobody thinks” the measures Barroso proposes are will work.
“The government is floundering. It can fall anytime, if anything unexpected happens. The future looks extremely grim,” EurActiv Greece said.