Greek Government To Unveil Austerity Package

With Greece on the edge of bankruptcy, its government has to agree to a sweeping austerity package. The measures are expected to include sharp salary cuts and new taxes on a population already reeling from the biggest financial crisis in its history.

Downtown Athens is filled with cafes, but it's quieter than usual. Gas prices have soared, and there are many fewer cars on streets. Shops are nearly empty; at one souvenir store, the manager says business has dropped 45 to 50 percent since last year.

The mood is one of anxious expectation as the country waits for news of an international bailout.

Like many people here, pharmacist Giorgos Pogas feels resentment against Greece's European partners.

"We need help right now," Pogas says through an interpreter. "I want the help but I don't want it to be something that is predatory, which is what I feel the conditions are right now. We are one family, and as a family we should be dealing with each other more fairly."

Over the past few weeks, the Greek drama resembled a morality play between the profligate high-spending Greeks and the parsimonious and rational Germans. It's Germany, after all, that would be footing the highest bill to bail out Greece.

The popular German media has targeted the country with suggestions like it sell its islands and the Acropolis.

In return, Greeks raised the issue of German reparations from World War II when the Nazis occupied the country.

But overall, Greeks seem resigned — despite their history of strong unions and massive demonstrations that sometimes lead to violence.

"We have all been surprised because there hasn't been such an outburst of protests and anger," says Alexis Papahelas, editor of the influential newspaper Kathimerini.

"People were terrified, and people realized for the first time in our history that we're going to be bankrupt. Everyone is scared and is waiting for the captain and crew to see where they will take the boat."

"The recession will be severe, and people will feel in their pockets the difference that all these measures will make," Papahelas says. "There is going to be quite a bit of unrest; people are getting very angry with their politicians for getting them where we are now."

The new austerity measures are expected to include a three-year wage freeze in the huge public sector, the abolition of the traditional salary bonuses, raising the pension age to 67, as well as a 2 to 3 percent increase in the value added tax — the second this year.

Papahelas says these drastic measures should finally convince Germany to give the green light to a long-delayed European bailout package. He says Greece got an extra boost from President Obama when he called German Chancellor Angela Merkel.

"He realized that Greece could potentially become the Lehman Brothers of the sovereign debt issue and create an overall crisis in the world banking system," Papahelas says. "He advised Chancellor Merkel to actually speed up on this, because she was so caught up, in my opinion, in local politics, that she missed the big picture."

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