Aryanews- Greek Prime Minister George Papandreou said on Tuesday his country was fighting for survival against bankruptcy and urged civil servants and pensioners to accept sacrifices to save the debt-burdened nation.
In a dramatic speech to his Socialist PASOK party on the eve of a cabinet meeting expected to approve new austerity measures, Papandreou said: "I will fight to save the fatherland from whatever the nightmare possibility of bankruptcy might entail."
Under pressure to meet European Union demands to find up to 4.8 billion euros ($6.5 billion) in additional savings before he visits Germany on Friday, he played up the risk of default, saying speculators had made borrowing costs prohibitive.
"If anyone thinks that this is a remote nightmare scenario, they don't realise what the situation is," he said. "Each day we discover new holes, new landmines, in the budget deficit."
Papandreou did not spell out specific measures but he said public employees would have to get by on less, and the state could not go on subsidising pensions. That could hurt two of PASOK's key support bases.
"We need to take tough decisions, decisions that can be unfair," he declared.
Government sources said measures under consideration included raising value added tax (VAT), increasing duty on fuel, cutting public sector pay, freezing pensions and higher duty on fuel, tobacco, alcohol and luxury goods.
Greece's borrowing costs fell to their lowest level in weeks on Tuesday amid growing expectations that the government will announce new austerity measures that will in turn help it secure European financial support.
"There is considerably more confidence now that there will be some form of support mechanism to help Greece," said Kornelius Purps, a strategist at UniCredit in Munich.