May Day In Greece More Like A Distress Call Greece is in the grips of a devastating financial crisis. Large rallies are being staged Saturday to protest expected new austerity measures. Prime Minister George Papandreou says wage cuts and tax hikes are necessary to ensure the country's survival.
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May Day In Greece More Like A Distress Call

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May Day In Greece More Like A Distress Call

May Day In Greece More Like A Distress Call

May Day In Greece More Like A Distress Call

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Greece is in the grips of a devastating financial crisis. Large rallies are being staged Saturday to protest expected new austerity measures. Prime Minister George Papandreou says wage cuts and tax hikes are necessary to ensure the country's survival.

SCOTT SIMON, Host:

NPR's Sylvia Poggioli reports from Athens.

SYLVIA POGGIOLI: Demetrius Sakapapolous(ph) is doing inventory in his empty paint shop.

DEMETRIUS SAKAPAPOLOUS: (Paint Store Owner)(Through translator) I think measures are necessary, of course, but for the average Greek, like a pensioner who makes 600 euros a month or who makes a salary of 700 euros a month, these are devastating. People cannot afford to cut more than they have already cut.

COSTAS PANAGOPOULOS: More than 60 percent said that they cannot accept new austerity measures. Of course we have no choice.

POGGIOLI: Costas Panagopoulos runs to the ALCO Polling Agency. He says that despite widespread anger, the government has a big asset in its prime minister. He's still widely popular.

PANAGOPOULOS: Papandreou is probably the only politician who still can communicate with people. They trust him quite a lot.

POGGIOLI: Gikas Hardouvelis, chief economist of Eurobank, says the public sector has swollen to the point of costing Greece more than 50 percent of its GDP.

GIKAS HARDOUVELIS: The public thought of the public sector as a sacred cow. It's there for them to get benefits. They never thought they had obligations towards the public sector. Politicians behave in a similar way.

POGGIOLI: Economist Yanis Sturnatas(ph), a former government advisor, goes so far as to hail the new austerity measures as a golden opportunity to eliminate waste and finally modernize the economy.

YANIS STURNATAS: We think that the GDP will grow by 15 percent in five years, and productivity by 10 percent.

POGGIOLI: Many other economists worry that the drastic cutbacks may further delay economic recovery and endanger Greece's ability to repay its debts. Yet economist Hardouvelis of Eurobank says Europeans may be reluctant to help Greece but they have much at stake that it avoid default.

HARDOUVELIS: Because they own Greek bonds. The Greek fiscal debt is not in Greek hands. It's in German hands, it's in French hands, in Belgian hands, in Swiss hands, in Scandinavian hands. It's not in Greek hands. So these people have an incentive to make sure that Greece floats.

POGGIOLI: Sylvia Poggioli, NPR News, Athens.

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