Greek church leader says austerity 'fatal'

By Derek Gatopoulos

Associated Press

Published: Thursday, Feb. 2 2012 10:00 a.m. MST

A man wrapped in a sleeping bag during near-freezing temperatures walks past a graffiti-covered wall in central Athens, Wednesday, Feb. 1, 2012. An International Monetary Fund debt inspector said in a newspaper interview published Wednesday that negotiations for landmark debt deals with Greece will be concluded in a "matter of days" but pressed the recession-hit country to lower employment costs and even slash the minimum wage.

Petros Giannakouris, Associated Press

ATHENS, Greece — The leader of Greece's Orthodox Church on Thursday warned rising poverty in the crisis-hit country could trigger a "social explosion," as the government raced to push through more cost-cutting reforms needed to conclude debt deals and avoid a default in March.

"Homelessness and even hunger — phenomena seen during (World War Two) — have reached nightmare proportions," Ieronymos wrote in a letter to Prime Minister Lucas Papademos.

"Patience among Greeks is running out, giving way to a sense of anger, and the danger of a social explosion cannot be ignored any longer."

He added: "The medicine we are taking has proved fatal for the nation. More painful, and more unjust measures are now set to follow along the same, hopeless course."

Greece is promising rescue creditors tougher austerity measures as it nears agreement for a second bailout worth €130 billion ($172 billion) with its partners in the 17-nation eurozone and the International Monetary Fund, and a related deal with private creditors that will see €100 billion wiped off the national debt.

Without those agreements, Greece faces bankruptcy next month as it is unable to cover a €14.5 billion bond repayment due on March 20.

Under pressure from the government and rescue creditors, leaders of Greece's unions and employers resumed talks to slash labor costs in the private sector.

The two sides said they had made progress but not yet reached an agreement after their three-hour meeting, and said they would inform the government and rescue creditors of their respective positions.

Debt inspectors from the EU, IMF and European Central Bank — know as the troika — are currently visiting Athens, and insist the cuts are needed to boost Greece's sluggish competitiveness.

"This is a very difficult negotiation and of course there are differences of opinion, so we will see where that leads," Greece's government spokesman Pantelis Kapsis told private Mega television.

"As a country, we have reached the brink of official bankruptcy. We have been borrowing for so many years and now we have our backs to the wall, so we have difficult decisions to make."

The Greek church has stepped up a charity drive this week, during a cold snap that left much of the country in sub-freezing temperatures and a growing number of homeless people at risk.

Unemployment in Greece has surged to 19.2 percent, with the jobless rate for people under age 25 at 47.2 percent, according to figures for October from the EU statistics agency, Eurostat.

Also Thursday, workers from the state-run national health service gathered in protest outside the Health Ministry to protest spending cuts in health care, including a new round of wage reductions which took effect on Feb. 1.

One group of protesters carried an empty coffin outside the central Athens building.

Theodora Tongas contributed to this report.

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