PM says Greece ‘deserves respect,’ calls for ‘definitive solution’
The Greek prime minister called for a ?definitive solution? to his country’s debt woes when eurozone leaders get together again on Wednesday to take on the Continent’s burgeoning crisis.
George Papandreou was speaking late Sunday as a European Union meeting in Brussels once again put off tough decisions on the recapitalization of European banks, the strengthening of a rescue fund and on the size of haircut for Greek bondholders.
?We want to lessen the burden of the debt, a solution that will re-establish credibility,? Papandreou said.
The days up to the Wednesday meeting remain vital for negotiations. Sharp differences remain over the size of losses private holders of Greek government bonds will have to accept. The EU leaders discussed a writedown of about 50-60 percent but Athens is adamant that the proposal has to be based around investors accepting the haircut voluntarily.
Private sector holders of Greek government bonds agreed in July to a 21 percent writedown in the value of their holdings to reduce Greece?s debt burden, but this is now deemed too little. Greek debt is forecast to reach 160 percent of GDP this year.
?This debt is onerous and must lighten for us to breathe again,? Papandreou said.
Meanwhile, his socialist government is facing growing pressure at home as repeated rounds of budget cuts, job cuts and tax hikes have sparked near-daily strikes and riots. One person died after clashes during anti-austerity protests in Athens on Thursday.
Greece is looking at a fourth year of recession while unemployment has hit a record of 16.5 percent.
?This national battle has been recognized by everybody,? Papandreou said in Brussels. ?We are a proud people. We deserve this respect,? he said.
A full summit of the EU’s 27 member states is to be held on Wednesday alongside a summit gathering leaders of the 17-nation eurozone.
But German Chancellor Angela Merkel told reporters that the decisions to be taken on Wednesday would not be the last step to overcome the crisis.
