Greece unrest mounts as PMs meet

Date: Friday 05 Mar 2010

Germany's chancellor Angela Merkel gave limited backing to Greece today ahead of a meeting in Berlin with Greek prime minister George Papandreou as civil unrest worsened over his latest austerity package.

Police and protestors clashed violently in Athens over the plans unveiled on Wednesday and endorsed by the Greek parliament today.

The proposals include an immediate pension freeze, wage cuts in the public sector and higher VAT and are designed to save €4.8bn annually and reduce Greece’s budget deficit to 8.7% of GDP.

Papandreou wants the talks with Merkel to result in a German commitment to provide support if Greece cannot raise money from the markets. Greece needs to refinance €20bn by the end of May and €50bn by the end of the year.

The prospect of bailing out its EU neighbour is not popular in Germany, however. Economy Minister Rainer Bruederle said earlier that his government "does not intend to give a cent" to Greece in financial aid, though Merkel was predictably more conciliatory saying it would "stand helpfully by Greece's side".

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