Hillarysworld

Greece: 'There's a sense [corrupt] people have got away with it'

Tension persists on the streets of Athens but the populace is starting to accept the austerity measures

The austerity measures that have caused havoc on the streets of Greece appear to be gaining support as Greeks, perhaps spooked by the latest violence, begin to throw their weight behind them.

In a poll published yesterday that will hearten the crisis-hit government, 55.2% of those asked said they would accept the draconian European Union and International Monetary Fund-sponsored economic and structural reforms as an exit route from the country's financial turmoil.

In the same survey, conducted for the authoritative Sunday Vima, 56.3% said they preferred wage cuts to national bankruptcy; over 70% told the Kappa research poll, a day after the spiralling economic crisis claimed its first lives, that bickering political parties should bury their differences and cooperate.

But while Greeks seem grudgingly willing to back measures that include the abolishment of bonuses, an increase in the pension age and a stiff rise in VAT, most believe social unrest will also intensify.

Support for demonstrations that have put the ruling socialists increasingly on the defensive is overwhelming – even if most Greeks have condemned the violence that radical "anti-establishment" protestors seem bent on sowing.

The majority said protests should continue even if they also believed that street opposition is unlikely to result in a change of government policy.

Internationally, the austerity measures are regarded as vital if Athens is to avoid a sovereign default and unlock the loans it needs to redeem €8.5bn in maturing debt by 19 May.

The beleaguered Prime Minister George Papandreou agreed to the stringent three-year programme, which aims to squeeze savings of €30bn from the budget by 2012, in return for up to €120bn in emergency aid.

The debt-stricken country announced it would activate the rescue package, the biggest bailout in history, after it ran out of options to borrow on capital markets amid steeply rising costs.

But the backlash has been fierce and unforgiving. Unions, who announced further walkouts this week, remain determined to oppose the "savage" measures.

With the policies aimed squarely at trimming Greece's massively swollen public sector, civil servants stand to lose the equivalent of two months' pay.

Worse still, the perception is growing that the government has yet to announce "hidden" measures that it has also agreed to as part of the unprecedented package.

"The new measures will come in waves," proclaimed the front page of the mass-selling Ethnos newspaper. "[There are] secret terms of the agreement [that foresee] additional cuts and taxes."

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US has big lessons to learn fast from the Greek fiasco. A fiscally responsible government and a sound system of entitlements is essential to the health of an economy. Sooner the imbalances are corrected the better. We do not have nearly the half the level of entitlements in Greece, but our economy is overburdened with debt created largely by a history of wars and their consequences - something we have to recognize.  Coming out of the deep hole we are in will require that we pull out of war mode and chopping on entitlements all at the same time.