ATHENS -The European Union urged Greece to
take extra austerity measures within days to tackle a debt crisis that has
shaken the euro zone and promised to help Athens overcome the problem.
EU Economic and Monetary Affairs
Commissioner Olli Rehn made the call after talks with Greek officials amid
growing market expectations of a trade-off between new deficit-cutting steps
and practical EU support for Greek borrowing.
"I'm sure that together we
shall overcome these formidable economic and fiscal challenges," Rehn said
after meeting Finance Minister George Papaconstantinou.
"I want to encourage the Greek
authorities to consider and announce additional measures in the coming days to
meet this target," he said.
Prime Minister George Papandreou
appeared to be preparing the nation for more sacrifices in broadcast remarks to
the cabinet dramatizing the crisis and appealing for public support. His labour
minister proposed a freeze on pensions this year as one measure to contain spending.
"Today we ask Greek men and
women to enlist in our common cause to save our country and the overwhelming
majority of our citizens are willing to do it despite the price and despite the
burden ... Everybody says yes," Papandreou said.
He has a potentially crucial
meeting in Berlin on Friday with Chancellor Angela Merkel of Germany, which is
Europe's biggest economy and holds the key to any financial support.
A German government spokeswoman
maintained it was up to Greece to pursue budget consolidation to win the
confidence of markets and said that Berlin had nothing new to report on the
issue of possible steps to support Greek debt.
Greece's borrowing costs tumbled to
their lowest level since mid-February on expectations the government will agree
soon on new tax rises and spending cuts to plug a budget gap which EU experts
say has grown due to a lingering recession.