ATHENS, Greece — Greece's prime minister insisted Wednesday his government would see through new austerity measures and called again for a cross-party agreement on the reforms, which he has so far failed to secure despite European Union has pushed for.
George Papandreou renewed his commitment to reforms as international debt inspectors returned to Athens to continue a crucial review of Greece's progress in meeting the terms of its €110 billion ($155 billion) bailout package from other European Union countries and the International Monetary Fund.
They will determine whether the country receives the next €12 billion installment of rescue loans in June — and could indicate whether Greece will need extra help beyond the current rescue loans, such as a second bailout.
"We have achieved very difficult targets in a critical time, and this is what we must continue. We are entering a new phase of the program with determination," Papandreou told reporters after briefing the country's president, Karolos Papoulias, on the latest developments.
"As I have stressed before, always the aim for me in these crucial times is for national cohesion," he said. "And I am totally open, as I have stressed to the political leaders, to every new idea, proposal that is realistic, effective."
He insisted, both in his talks with Papoulias and in the comments he made afterwards, that he was determined to keep Greece in the eurozone.
He did not answer a question on whether he was considering holding a referendum on the austerity measures — as press reports have indicated. Government spokesman Giorgos Petalotis, asked about the same issue later in the day, said there was "no particular thought" at the moment of doing so.
Many both within Greece and in the rest of Europe fear that even with the current bailout, the country will not be able to pull itself out of the crisis. Some argue that with a debt of over €342 billion last year, along with a budget deficit of 10.5 percent of gross domestic product, Greece will eventually have to restructure its debt — pay creditors later or less than the full amount owed.
But the European Central Bank has been adamant this should not be considered an option.
"To think that there is an easy way out, in that a country's debts are largely or fully relieved, is an illusion," the ECB's chief economist, Juergen Stark, said in Berlin. "The necessary structural adjustments must be made."
Stark pointed to the dire effects restructuring would have on Greek banks' capital and to a likely need for subsequent recapitalization — which "would not be very cheap."
"We should think one connection further when we use this miracle word debt relief, or debt restructuring — be it soft or hard," he told a conference organized by a group linked to German Chancellor Angela Merkel's party.
In Athens, Papandreou met with political party leaders Tuesday, seeking support for a midterm package of measures which will run to 2015 — two years beyond his government's mandate. But he failed to win consensus.
The new plan includes more than €6 billion worth of measures for this year, including tax increases and an immediate start to previously announced privatizations. It aims to narrow the country's budget deficit from 10.5 percent of gross domestic product last year to 7.5 percent by the end of 2011.
Top EU officials have argued that Greece, which is struggling to meet the terms of the bailout extended last year and could need more help, needs opposition parties to back the debt-cutting plans to ensure they can be implemented smoothly.
But Antonis Samaras, the head of the main opposition conservative party, said that while he agreed with several elements, including the privatizations, the overall direction of the plan, and the hike in taxes in particular, was wrong.
"To this demonstrably mistaken recipe, I will not agree," said Samaras, whose party officials were to meet later Wednesday with debt inspectors.Comment on this story
Unions have already begun protests over the privatizations, with employees of Hellenic Postbank, one of the enterprises up for privatization, occupying the company headquarters in central Athens. Employees at the gambling monopoly OPAP held a 24-hour strike against plans to sell the state's stake in the company.
A communist party-backed union has called for a demonstration on Saturday, while a rallies were being planned in Athens and the country's second largest city of Thessaloniki Wednesday night following a call through a social networking site for "outraged citizens" to demonstrate.
Derek Gatopoulos in Athens and Geir Moulson in Berlin contributed.