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Provopoulos: Failure To Approve Greek Austerity Measures Will Be 'Suicide': FT

6/29/2011 4:58 AM ET

Bank of Greece Governor George Provopoulos said it would be 'suicide' if the government fails to pass the austerity measures in parliament on Wednesday, the Financial Times reported.

In an interview with the business daily, Provopoulos expressed concern that Greek politicians had played down the crisis over the past 18 months, which has eventually led towards a possible default.

He noted that the new Portugal government had said it will be difficult two years ahead as soon as it came into power. "We have not had that kind of talk here," the central bank chief said.

There was not even a debate in Greece about what went wrong, Provopoulos, who is also a member of European Central Bank Governing Council, added.

"For parliament to vote against this package would be a crime - the country would be voting for its suicide," said Provopoulos.

The only way to avoid an immediate default is for the Greek Parliament to endorse the austerity programme that includes medium-term fiscal strategy and privatization measures, European Union Economic and Monetary Affairs Commissioner Olli Rehn warned Tuesday.

"To those who speculate about other options, let me say this clearly: there is no Plan B to avoid default," Rehn said. "I trust that the Greek political leaders are fully aware of the responsibility that lies on their shoulders to avoid default."

Workers' unions started a 48-hour general strike on Tuesday, the latest in a string of protests against the austerity measures proposed by the government. Protests turned violent. The shutdown comes as Greek lawmakers are set to vote on a EUR 28 billion austerity measures and a EUR 50 billion privatization plan.

Eurozone finance ministers are expected to meet on July 3 and approve the EUR 12 billion EU/IMF aid payment to Greece, if the country's parliament passes the austerity plan. Greece became the first recipient of an IMF-European Union sponsored bailout worth EUR 110 billion last year.

Eurozone ministers are also expected to decide a second bailout for the debt-laden country. The size of the new rescue package is reportedly between EUR 70 billion to EUR 100 billion.

by RTT Staff Writer

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