PM: 'We have to put our house in order'

Greek Prime Minister George Papandreou appealed for national unity on Saturday to tackle the financial crisis sparked by the country’s crushing debt, as parliament began debating the 2010 budget.

Addressing parliamentarians from his ruling socialist PASOK party ahead of the debate, Papandreou called for “a national mobilisation, of our political parties, unions, the forces of business and labour, and all citizens.”

“We have to put our house in order,” he said, defending the unpopular austerity measures planned to rein in the 300-billion-euro (435-billion-dollar) debt, which has riled credit markets and pushed down the euro currency.

Credit rating agency Standard and Poor’s downgraded two Greek banks and put two others on negative watch on Friday, the latest in a series of blows delivered to Greece by international ratings agencies in recent weeks.

The draft budget for 2010 aims to rein in the public deficit by 3.6 percentage points, from 12.7 percent of gross domestic product to 9.1 percent.

But the government’s announced austerity measures were met this week by union protests and an arson attack on the ruling party’s offices.

Papandreou repeated a pledge that the government will not increase the tax burden for low- and middle-income households.

He said half of the eight-billion-euro deficit reduction would come from spending cuts and the trimming of waste, and half from more effective taxation of the wealthy and a crackdown on tax evasion.

Greece is determined “to rebuild the credibility we have lost,” he said, “to radically change direction, to put a stop to the practices and mentalities that have set us years behind.”
“We cannot afford to delay tackling the deep structural problems that are choking us,” he told parliamentarians.

Greece is mired in recession and had an unemployment rate of 9.3 percent in the third quarter, up from 7.2 percent in the same period of 2008.

After the debate, the budget will be put to a vote in the 300-seat chamber late on Wednesday. The governing party has a 10-seat parliamentary majority and is expected to carry the vote.