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Greece PM seeks support for cuts Greece PM in anti-corruption plan
(8 minutes later)
Greek PM George Papandreou has met opposition party leaders to discuss his debt-reduction plan aimed at quelling the country's economic crisis. A plan to quell Greece's economic crisis will combat "systemic corruption" and "red tape", Greece's PM George Papandreou has told the BBC.
He earlier unveiled a raft of spending cuts, warning the country was at risk of "sinking under its debts". He has held talks with opposition leaders to discuss his raft of spending cuts, focusing on tackling corruption.
The planned cuts would include a 10% cut in social security and government spending, as well as a 90% tax on senior bankers' bonuses. The planned reforms would include a 10% cut in social security and government spending, as well as a 90% tax on senior bankers' bonuses.
Trade unions have called for nationwide strikes to protest against the reforms.Trade unions have called for nationwide strikes to protest against the reforms.
Tuesday's meeting with opposition leaders ranging from the conservatives to the Communists was chaired by the country's president, and focused on tackling corruption. But Mr Papandreou urged unity, saying all members of society would have to pull their weight if Greece was to avoid "sinking under all its debts".
Greece has come under increasing pressure to take action over its deficit from the European Central Bank. The country's public debt stands at 300bn euros ($442bn; £269bn).
International ratings agency Fitch last week downgraded the country's credit rating - meaning it thought Greece was now a riskier place to invest.
Cut corruption
Systemic corruption and clientelism - paying money for political favours - had created a sense of the lack of the rule of law in Greece and accentuated issues such as tax evasion, the prime minister told the BBC.
He says his plan will help reduce Greece's public deficit from the current 12% to under 3% by 2013.
"Bureaucracy costs 7% of GDP and we hope to halve it by cutting corruption and red tape," he said.
Although Mr Papandreou has a big enough parliamentary majority to force through any cuts he desires, he wants to forge a cross-party political consensus.
Combating corruption was high on the agenda at Tuesday's meeting with opposition leaders ranging from the conservatives to the Communists, which was chaired by the country's president.
Speaking after the meeting, Mr Papandreou said he and the party leaders had been in agreement on several points, "despite our possible ideological differences", AP reported.Speaking after the meeting, Mr Papandreou said he and the party leaders had been in agreement on several points, "despite our possible ideological differences", AP reported.
However, opposition leaders were less welcoming about the measures announced on Monday, which Mr Papandreou said would help reduce Greece's public deficit from the current 12% to under 3% by 2013. However, opposition leaders were less welcoming about the measures announced on Monday.
"What is he asking us to support? His generalities? His delays?" said conservative leader Antonis Samaras, in comments reported by Associated Press."What is he asking us to support? His generalities? His delays?" said conservative leader Antonis Samaras, in comments reported by Associated Press.
Protection racketeers? The Communists, meanwhile, have already made it clear they do not think the financial crisis is a matter that requires national unity.
Mr Papandreou proposed cuts in defence spending, pay and hiring freezes for public sector workers, and the closure of a third of Greece's overseas tourism offices. Supporters of the left-wing PAME union on Tuesday attempted to blockade the entry to the finance ministry, with protestors lowering a massive banner reading "Rise up" from the roof of the building.
The carefully choreographed demonstration was, says our correspondent, the start of what is likely to be a nationwide campaign of industrial unrest.
'Change or sink'
On Monday Mr Papandreou had warned that Greece had "lost every trace of credibility" and needed to "change or sink".
Greece is trying to reassure markets about its economy
He announced cuts in defence spending, pay and hiring freezes for public sector workers, as well as the closure of a third of Greece's overseas tourism offices.
He also called for reforms of the tax inspectorate, designed to remove corruption and end tax evasion.He also called for reforms of the tax inspectorate, designed to remove corruption and end tax evasion.
Many businesses regard the inspectors as all-powerful protection racketeers who threaten companies with audits and heavy fines unless they pay bribes, says the BBC's Malcolm Brabant in Athens.Many businesses regard the inspectors as all-powerful protection racketeers who threaten companies with audits and heavy fines unless they pay bribes, says the BBC's Malcolm Brabant in Athens.
Mr Papandreou says the inspectors will be monitored by a new finance police, designed to guarantee that companies and individuals pay fair amounts of tax.Mr Papandreou says the inspectors will be monitored by a new finance police, designed to guarantee that companies and individuals pay fair amounts of tax.
In a speech to business and union leaders on Monday, Mr Papandreou said that Greece had "lost every trace of credibility" and needed to "change or sink". Markets had a mixed response to the raft of cuts. On Tuesday evening, the Athens Stock Exchange was down by around 2%.
The comments came a week after international ratings agency Fitch downgraded the country's credit rating - meaning it thought Greece was now a riskier place to invest.
Risky business
Finance Minister George Papaconstantinou earlier defended Greece's position in the eurozone, despite its deficit being far above the European Union limit of 3%.
He said Greece was worthy of its place because it "abides by the rules".
Mr Papaconstantinou told the BBC: "Greece is not the next Iceland, nor is it the next Dubai... it is tackling the very serious situation that we have."
Since last week's decision by Fitch, Greece has come under increasing pressure to take action over its deficit from the European Central Bank. The country's public debt stands at 300bn euros ($442bn; £269bn).
Greece is trying to reassure markets about its economy
On Tuesday, the Athens Stock Exchange was down by more than 1%.
Meanwhile, supporters of the left-wing PAME union attempted to blockade the entry to the finance ministry where the cuts were being orchestrated.
The 100-strong protest was, says our correspondent, a carefully choreographed demonstration designed for maximum coverage on Greek morning television, and the start of what is likely to be a nationwide campaign of industrial unrest.
Protestors climbed onto the roof and lowered a banner reading "Rise up" covering four floors at the building.
"There will be no truce, no truce in fighting for the rights of the workers," said PAME spokesman Giorgos Skiadiotis.
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