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International Debt Inspectors Return To Greece

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DAVID GREENE, Host:

This is MORNING EDITION from NPR News. I'm David Greene in for Renee Montagne.

STEVE INSKEEP, Host:

And I'm Steve Inskeep. Good morning. A single event yesterday symbolized the conflicting forces in Greece as it faces possible default on its debts. Financial inspectors returned yesterday to review whether the government is complying with the terms of a $150 billion bailout. But the inspectors were met with loud demonstration, protesting further wage and pension cuts, public sector layoffs, and higher taxes, all of which have been imposed to try to pay Greece's debts.

NPR's Sylvia Poggioli is on the line from Athens with more. Hi, Sylvia.

SYLVIA POGGIOLI: Hi there, Steve.

INSKEEP: So we know about the demonstrations out on the streets. What about inside the meeting rooms? Are the talks going well between European financial officials and Greek officials?

POGGIOLI: Well, you know, the beginning could not have possibly been more embarrassing because the inspectors found the Finance Ministry in downtown Athens occupied by angry ministry employees and the talks had to be moved to an unknown location. Outside, protesters were shouting: Take your bailout and go home. But the government said the initial meeting was positive and instructive, but it did not release any details. The inspectors could stay here for a week to determine whether the government's new measures are effective and merits the next installment of the bailout plan.

INSKEEP: You said the government's new measures. What new measures?

POGGIOLI: Well, the most controversial is a new property tax passed by the parliament on Tuesday. It's very harsh for a country were 85 percent of the population is made up of homeowners. Other measures are further cuts in wages and pensions. In addition, the tax-free ceiling on family income has been reduced to just under $7,000 per year. The government even tried to lift the taboo of laying off civil servants; 30,000 were going to be furloughed. But it's very hard to trim the inflated public sector in Greece because the constitution actually protects these jobs. It's as if civil servants had tenure, so it's more complicated and new laws will have to be passed.

Finally, there's a really strong international pressure for massive privatization of state-owned companies and tracks of land, but this is a very sensitive issue because it touches on national sovereignty and many Greeks fear their government is selling off the family jewels.

INSKEEP: Hmm. Well, let me ask about another aspect of this, Sylvia. So we've heard that Greeks are very unhappy with the conditions of this bailout. But of course other Europeans seem to be very unhappy about having to help pay - Germans especially, and of course they're the biggest economy in Europe. Yet the German parliament yesterday did approve expanding the eurozone bailout fund to help countries like Greece. Did people in Greece say thank you?

POGGIOLI: Well, the finance minister, Evangelos Venizelos, welcomed the vote. But, you know, what's really interesting is today's newspapers from left to right barely mention it on the front page. They're focusing on the impact these new measures are going to have on Greek society. Even conservative papers like Kathimerini are very critical of the negative effect of so much belt tightening on the middle class. There's a growing chorus of people who say the government policy is ineffective, impoverishing the population without offering a way out. This is what they're focusing on here.

INSKEEP: Can a Democratic government impose these measures against so much protest?

POGGIOLI: Yeah. And the question is: Can they implement them? For instance, the property tax is supposed to be added to electricity bills and the utility company is supposed to cut off power to those who don't pay, but the unions said workers won't be the sheriff who puts a gun at the head of the Greek people. And just this morning, a group of demonstrators tried to block access to tax offices to protest special new income taxes. Today is the deadline for paying those taxes.

And you know, opinion polls show that 92 percent of Greeks believe the measures are unfair. The approval ratings of the ruling Socialist Party are a record low - some 15 percent. Most lawmakers don't even dare visit their constituencies. Prime Minister George Papandreou has not been seen at his favorite restaurant for many weeks. But the other day in Berlin, he said he doesn't care about popular support because his task, he said, is to save the country. But you wonder how such drastic cutbacks can be applied without at least some social consensus.

And you know, probably the international inspectors are also pretty skeptical because before returning here they demanded written assurances from Greece that its new pledges will be met, and that's a sign of just how little confidence they have in the Greek government.

INSKEEP: Sylvia, thanks very much.

POGGIOLI: Thank you, Steve.

INSKEEP: NPR's Sylvia Poggioli is in Athens. Transcript provided by NPR, Copyright NPR.

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