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Eurozone crisis: Greece 'can't take any more cuts' Eurozone crisis: Greece 'can't take any more cuts'
(about 1 hour later)
The Greek people have been pushed to the limit by austerity measures demanded by the EU and IMF, the country's public order minister says.The Greek people have been pushed to the limit by austerity measures demanded by the EU and IMF, the country's public order minister says.
Christos Papoutsis said Greece had made "superhuman" efforts to comply, and the people "can't take any more".Christos Papoutsis said Greece had made "superhuman" efforts to comply, and the people "can't take any more".
Eurozone chiefs cancelled a meeting with Greek officials earlier, demanding further cuts and reassurances.Eurozone chiefs cancelled a meeting with Greek officials earlier, demanding further cuts and reassurances.
International lenders have told Greece to make huge cuts in return for a 130bn euro ($170bn, £109bn) bailout package.International lenders have told Greece to make huge cuts in return for a 130bn euro ($170bn, £109bn) bailout package.
The Greek parliament approved an austerity package on the weekend, despite violent protests sweeping the country.The Greek parliament approved an austerity package on the weekend, despite violent protests sweeping the country.
But eurozone ministers have demanded a further 325m euros of cuts.But eurozone ministers have demanded a further 325m euros of cuts.
They have also insisted that all major Greek parties give an assurance that the cuts will be enacted regardless of who wins a general election scheduled for April.They have also insisted that all major Greek parties give an assurance that the cuts will be enacted regardless of who wins a general election scheduled for April.
Antonis Samaras, whose New Democracy party is a member of the governing coalition, has hinted that he would try to renegotiate the bailout deal after the election. Antonis Samaras, whose New Democracy party is a member of the governing coalition and is expected to win April's vote, had hinted that he would try to renegotiate the bailout deal after the election.
There is now huge mistrust between eurozone leaders and Greece. Despite Athens passing its austerity package in parliament last Sunday, Brussels has set two more conditions for Greece's international bailout: that an extra 325m euros of savings are found and that the Greek government sign a pledge to implement the cuts.There is now huge mistrust between eurozone leaders and Greece. Despite Athens passing its austerity package in parliament last Sunday, Brussels has set two more conditions for Greece's international bailout: that an extra 325m euros of savings are found and that the Greek government sign a pledge to implement the cuts.
The EU has grown exasperated with a perceived lack of commitment by Greece and there is now immense pressure on Athens to quicken the pace of change. But there is real anger in Greece. Athens saw the worst rioting for years when the austerity package was passed by parliament.The EU has grown exasperated with a perceived lack of commitment by Greece and there is now immense pressure on Athens to quicken the pace of change. But there is real anger in Greece. Athens saw the worst rioting for years when the austerity package was passed by parliament.
Greece is now in a worrying situation. Its economy contracted by 7% in the last quarter. Eurozone finance ministers will now meet on Monday instead - perhaps the bailout will come then, but this game of brinkmanship could be very dangerous indeed.Greece is now in a worrying situation. Its economy contracted by 7% in the last quarter. Eurozone finance ministers will now meet on Monday instead - perhaps the bailout will come then, but this game of brinkmanship could be very dangerous indeed.
Reports say he has refused to give a written assurance that the cuts would be enforced. Earlier reports said Mr Samaras had refused to give a written assurance that the cuts would be enforced.
New Democracy is expected to win the election. But unnamed officials were quoted on Wednesday as saying Mr Samaras had now signed a letter committing him to the austerity package, and it would be delivered by the end of the day.
After a cabinet meeting late on Tuesday, Mr Papoutsis, a member of the other major coalition party Pasok, said Greece had "made all the efforts that it needed to do".After a cabinet meeting late on Tuesday, Mr Papoutsis, a member of the other major coalition party Pasok, said Greece had "made all the efforts that it needed to do".
"The people cannot take any more. The government is making superhuman efforts, and we have reached the limits of the social and economic system," he said."The people cannot take any more. The government is making superhuman efforts, and we have reached the limits of the social and economic system," he said.
"Greece has owned up to its own responsibilities, and the sacrifices of the Greek people are huge. I believe it is time for everyone to own up to their responsibilities.""Greece has owned up to its own responsibilities, and the sacrifices of the Greek people are huge. I believe it is time for everyone to own up to their responsibilities."
Eurozone ministers were due to hold talks on the bailout on Wednesday, but eurogroup head Jean-Claude Juncker said face-to-face talks would be replaced by a conference call.Eurozone ministers were due to hold talks on the bailout on Wednesday, but eurogroup head Jean-Claude Juncker said face-to-face talks would be replaced by a conference call.
He said Greece had not shown that it was committed to the austerity plan, and technical work was still needed "in a number of areas".He said Greece had not shown that it was committed to the austerity plan, and technical work was still needed "in a number of areas".
As well as 17 ministers from nations that use the euro, the president of the European Central Bank Mario Draghi and the Commissioner for Economic and Monetary Affairs, Olli Rehn, had also been due to attend the meeting.As well as 17 ministers from nations that use the euro, the president of the European Central Bank Mario Draghi and the Commissioner for Economic and Monetary Affairs, Olli Rehn, had also been due to attend the meeting.

What went wrong in Greece?

Greece's economic reforms, which led to it abandoning the drachma as its currency in favour of the euro in 2002, made it easier for the country to borrow money.
Greece went on a big, debt-funded spending spree, including paying for high-profile projects such as the 2004 Athens Olympics, which went well over its budget.
The country was hit by the downturn, which meant it had to spend more on benefits and received less in taxes. There were also doubts about the accuracy of its economic statistics.
Greece's economic problems meant lenders started charging higher interest rates to lend it money. Widespread tax evasion also hit the government's coffers.
There have been demonstrations against the government's austerity measures to deal with its debt, such as cuts to public sector pay and pensions, reduced benefits and increased taxes.
The EU, IMF and European Central Bank agreed 229bn euros ($300bn; £190bn) of rescue loans for Greece. Prime Minister George Papandreou quit in November 2011 after trying to call a referendum.
Eurozone leaders are worried that if Greece were to default, and even leave the euro, it would cause a major financial crisis that could spread to much bigger economies such as Italy and Spain.
Under Prime Minister Lucas Papademos, Greece is trying to negotiate a big write-off of private debts and secure a second bail-out of 130bn euros ($170bn, £80bn) before a 20 March deadline.
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What went wrong in Greece?

Greece's economic reforms, which led to it abandoning the drachma as its currency in favour of the euro in 2002, made it easier for the country to borrow money.
Greece went on a big, debt-funded spending spree, including paying for high-profile projects such as the 2004 Athens Olympics, which went well over its budget.
The country was hit by the downturn, which meant it had to spend more on benefits and received less in taxes. There were also doubts about the accuracy of its economic statistics.
Greece's economic problems meant lenders started charging higher interest rates to lend it money. Widespread tax evasion also hit the government's coffers.
There have been demonstrations against the government's austerity measures to deal with its debt, such as cuts to public sector pay and pensions, reduced benefits and increased taxes.
The EU, IMF and European Central Bank agreed 229bn euros ($300bn; £190bn) of rescue loans for Greece. Prime Minister George Papandreou quit in November 2011 after trying to call a referendum.
Eurozone leaders are worried that if Greece were to default, and even leave the euro, it would cause a major financial crisis that could spread to much bigger economies such as Italy and Spain.
Under Prime Minister Lucas Papademos, Greece is trying to negotiate a big write-off of private debts and secure a second bail-out of 130bn euros ($170bn, £80bn) before a 20 March deadline.
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The latest bailout was agreed in principle by EU leaders in October, conditional on Greece adopting further measures to cut its deficit and restructure its economy.The latest bailout was agreed in principle by EU leaders in October, conditional on Greece adopting further measures to cut its deficit and restructure its economy.
On Sunday, Greek MPs approved extra cutbacks, but coalition parties had to expel more than 40 deputies for failing to back the bill.On Sunday, Greek MPs approved extra cutbacks, but coalition parties had to expel more than 40 deputies for failing to back the bill.
Thousands protested in Athens, where there were widespread clashes and buildings were set on fire. Violent protests were reported in cities across the country.Thousands protested in Athens, where there were widespread clashes and buildings were set on fire. Violent protests were reported in cities across the country.
On Tuesday, an official report showed that the decline of the Greek economy accelerated in the final three months of 2011.On Tuesday, an official report showed that the decline of the Greek economy accelerated in the final three months of 2011.
The estimate showed that, compared with a year earlier, Greek GDP contracted by 7% in the fourth quarter of 2011.The estimate showed that, compared with a year earlier, Greek GDP contracted by 7% in the fourth quarter of 2011.
That is an acceleration from the 5% contraction in the third quarter.That is an acceleration from the 5% contraction in the third quarter.
The report also shows that the Greek economy shrank 6% last year, an increase on earlier estimates and the fifth year of recession.The report also shows that the Greek economy shrank 6% last year, an increase on earlier estimates and the fifth year of recession.
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