Greek Prime Minister George Papandreou promised Sunday that the revival of the country's ailing economy would require no new pay cuts and tax hikes after bringing in deeply unpopular austerity measures.
"Whatever happens, there will be no additional burdens on salary earners and pensioners, and no rise in tax rates beyond what we have pledged," Papandreou wrote in an article in To Vima daily, two weeks before his Socialist party faces the electorate in local polls.
"Everybody, both inside and outside Greece, must understand that the sacrifices made by the Greek people are unprecedented," the premier wrote.
Papandreou's Socialists are trying to shore up support ahead of the November 7 municipal ballot, the first test of how their popularity has eroded due to the tough austerity measures they enacted this year to beat bankruptcy.
The outcome of the vote is also uncertain in many areas because of a controversial administrative overhaul that merged municipalities and prefectures to cut costs. According to the latest polls, the Socialists are unlikely to win the two main cities, Athens and Thessaloniki.
And in the greater Athens region, their candidate is threatened by a veteran Socialist who voted against the loan agreement with the European Union and the International Monetary Fund that rescued Greece in return for the cuts. The agreement, or memorandum, has been vilified by opposition parties who have dubbed Papandreou 'the memorandum PM'.
Greece has so far won plaudits from the EU and the IMF on its application of the draconian programme of pay and pension cuts and tax hikes to bring down its budget deficit which was nearly 14 percent in 2009.
But the EU's economic affairs commissioner this week said that Athens may be required to make additional austerity cuts to meet 2011 budget deficit targets as revised calculations will now include indebted public companies. The revision is expected to increase the budget deficit for 2009, the year on which the government's reform calculations are based. But the Greek finance minister insisted on Saturday that the deficit goals for next year would not change.
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