EU president sad for Greek victims, but says cuts are unavoidable

Brussels - European Union President Herman Van Rompuy on Wednesday expressed his sympathy over the death of three people in violent protests in Athens against planned austerity measures, but insisted the cuts were necessary.

"Our first thoughts today turn to the victims in Athens," Van Rompuy said in Brussels.

Greece's socialist government has pledged to reduce its deficit by a massive 11 percentage points of its gross domestic product (GDP) by 2014, in return for a three-year 110-billion-euro (146 billion dollars) loan from eurozone countries and the International Monetary Fund (IMF).

But despite the drama unfolding on the streets of Athens and other Greek cities, Van Rompuy insisted the sacrifices imposed by the EU/IMF bailout were unavoidable.

He said the size of the effort demanded was "extremely important" but added that it was "not without precedent," stressing that Greece itself had carried out a fiscal adjustment "of the same entity" in the 1989-1994 period.

At the time, Greece cut the deficit in its primary balance by 10.8 percentage points of GDP over five years, while now it is asked to reduce it by around 11 points in four years.

Van Rompuy, speaking at a press conference which concluded an EU-Canada summit, also railed against market speculation extending to other eurozone countries such as Greece and Spain.

"I now see totally irrational movements on the markets fueled by totally unfounded rumors," the EU president said, alluding to Tuesday's unconfirmed news that the EU and the IMF were preparing another bailout for Spain.

"The situation in those two countries has nothing to do with the situation in Greece," Van Rompuy stressed.

He declaring himself "certain" that the markets would in due time share his analysis and that "the contagion effect will be stopped."

Source: Earth Times.
Link: http://www.earthtimes.org/articles/show/322142,eu-president-sad-for-greek-victims-but-says-cuts-are-unavoidable.html.