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ATHENS — Greece's main opposition leader bluntly refused Monday to back new austerity measures designed to tackle the crippling debt crisis, arguing they would only bring further recession, despite the European Union's insistence for cross-party support.
Top EU finance officials have argued that Greece, which is struggling to meet the terms of an international euro110 billion ($154 billion) bailout and could require more help, needs all its political parties to back the debt-cutting plans to ensure they can be implemented smoothly.
They have not said outright that receiving the next installment of the bailout, due in late June, depends on a cross-party agreement, but have stressed the importance of opposition support.
Prime Minister George Papandreou was meeting the heads of opposition parties to seek consensus, a day after Greece announced extra measures to shrink its budget deficit, including more than euro6 billion ($8.4 billion) worth for this year and an immediate start to a previously announced euro50 billion privatization program.
Measures this year range from increased taxes to cutting down on social security costs, while the midterm austerity program will run to 2015, two years beyond the current government's mandate.
Antonis Samaras, head of the main opposition conservative party who earlier this month called for a renegotiation of the bailout deal, argued the government's overall direction in dealing with the crisis was wrong.
"To this demonstrably mistaken recipe (of the bailout deal), I will not agree," Samaras said shortly after meeting with Papandreou.
Samaras has in the past backed certain measures, such as privatizations, but said ever-increasing taxes served only to push the country deeper into recession. He underlined his party's proposal for reducing taxes as a means of jump-starting the economy.
"The government lacks the courage to restart the economy and is not considering a renegotiation. It is repeating the same mistake, and exceeding the limits of the Greek economy and of our people," Samaras said. "We remain opposed."
On Monday, Amadeu Altafaj Tardio, spokesman for the EU's Monetary Affairs Commissioner Olli Rehn, stressed it was "very important for us that the political groups in Greece set their disagreements aside, and clearly and unambiguously support in public the objectives and main policies of the economic policy and program for Greece."
However, the measures Greece announced Monday have not yet convinced other eurozone government that Athens will actually be able to fulfill its promises, said an official from one of the triple-A rated eurozone countries, which because of their good credit rating have an important position in bailout negotiations.
The official, who spoke on condition of anonymity because of the sensitivity of the situation, said some countries were concerned about whether measures would be implemented. He said they wanted to see more specific proof, such as the launch of negotiations with potential buyers, that Greece is indeed kicking off the promised privatization. Such concrete steps are a precondition not only for potential further support, but also the release of the next euro12 billion tranche of the already agreed loans in June, the official said.
Papandreou also faced criticism from other parties, with Alexis Tsipras of the Left Coalition calling for his resignation.
"I didn't come to discuss the looting of Greek society with Mr. Papandreou. I came to tell him that he must not ... go ahead with this crime against the Greek people," Tsipras said.
The country's finances are being reviewed by inspectors to determine whether Greece can receive the next batch of loans, worth euro12 billion ($16.8 billion). Finance Minister George Papaconstantinou has warned Greece faces default without the next installment.
Even with the loans, many analysts and European politicians are skeptical the country can pull itself out of the debt crisis and reduce a budget deficit of 10.5 percent and debt of more than euro340 billion ($476.68 billion) without extra help, or some form of debt restructuring — paying lenders less than the full amount or later than originally scheduled.
Ratings agency Moody's said it would consider a restructuring to be a default, and said such a move could affect other struggling European states.
"Moody's believes that a default is likely to have adverse credit rating implications for Greece, possibly some other stressed European sovereigns, and the Greek banks, regardless of the efforts made to achieve an "orderly" outcome. The full impact on Europe's capital markets would be hard to predict and harder still to control," the agency said.
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Gabriele Steinhauser in Brussels contributed.
