By Kerin Hope, FT.com
(FT) -- George Papandreou, Greek prime minister, told parliament on Friday that adoption of a rigorous three-year austerity programme being drawn up by the European Union and International Monetary Fund was "necessary... for the country's survival".
Mr Papandreou was defending his socialist government's decision to seek a multibillion-euro rescue package from its eurozone partners and the IMF against strong opposition from left wing parties and trade unions.
"What matters most is the survival of the nation -- that is a red line (that cannot be crossed)," he said.
The prime minister spoke as a team from the IMF, the European Commission and the European Central Bank were putting finishing touches to an unprecedented fiscal and structural reform programme aimed at cutting 10 percentage points off the budget deficit by 2013.
Details of the agreement are to be announced over the weekend, and they will be put before parliament for approval next week.
"The economic measures are necessary for our protection and the country's survival... this is our patriotic duty which we will carry out regardless of the cost," Mr Papandreou said.
However, trade unions are gearing up for May day demonstrations on Saturday and a general strike next Wednesday that will shut down public services and transport, including flights in and out of Athens international airport.
"This is a very tough package that will deepen the recession... the measures are one-sided and will bring strong reaction," said Yannis Panagopoulos, head of GSEE, an umbrella union for private sector workers.
An opinion poll published earlier this week showed 70 percent of those asked were against the IMF's participation in a rescue programme.
The reform package will include a further increase in value-added tax, a three-year wage freeze for public sector workers and additional cuts in allowances and the immediate opening of "closed-shop" professions -- from taxi drivers to legal services.
"These are measures that should put Greece back on the path to growth..?fiscal stabilization and liberalization -- there is no other way," said Yannis Stournaras, head of the private sector think-tank IOBE.
BNP Paribas warned on Friday the reform programme "will be tough going with gross domestic product falling at first and then growing below trend".
"With global growth uncertain and the likelihood of strong social opposition to some of the measures, there is a risk of the programme being interrupted. Burden-sharing with creditors in the form of rescheduling or debt reduction would then become likely," it said.
CNN
