The European Commission, International Monetary Fund and German government are among those who have welcomed the new package of austerity measures approved by prime minister George Papandreou’s cabinet in Athens on March 3 2010 – but already Greek pensioners have come out in protest against the plans which include a freeze on pensions.
 
In neighbouring Bulgaria, where the Finance Minister has expressed concern about an alleged risk of Greek-owned Bulgarian banks being "drained" by their owners, the central bank and Greek bank chiefs have issued assurances that this will not happen.
 
The plan approved by the Papandreou cabinet on March 3 envisages new spending cuts designed to save an additional about 4.8 billion euro in a move against the country’s excessive deficit.
 
The measures include a two per cent increase in value-added tax, a freeze in pensions and additional salary cuts for civil servants.
 
Earlier, the European Union had given Greece until mid-March to show that it was taking appropriate actions to lower its debt, VOA reported.
 
The new round of cost-cutting came after EU officials bluntly told Athens to make deeper spending cuts. International credit rating agencies have also warned of more damaging downgrades if Athens fails to rein in its debt.
 
European Commission President Jose Barroso said in Brussels on March 3 that the set of additional consolidation measures "confirms the Greek government's commitment to take all necessary measures to deliver the programme's objectives and in particular to ensure that the four per cent of GDP deficit reduction target for 2010 will be met".
 
Greece's ambitious programme to correct its fiscal imbalances was now on track, Barroso said.
 
"The additional measures announced today appropriately include expenditure cuts, and in particular savings in the public wage bill, which are essential for achieving permanent fiscal consolidation effects and restore competitiveness. The announced revenue-increasing measures also contribute to fiscal consolidation," he said.
 
Full and timely implementation of fiscal measures, along with decisive structural reforms, in compliance with the European Council decision was paramount, according to Barroso.
 
"This is in the interest of the Greek people, who will benefit from sounder public finances, better growth prospects and job opportunities. It is as well important for the overall financial stability of the euro area."
 
The European Commission believed that correcting imbalances and restoring competitiveness were essential to put Greece back on a sustainable path, he said.
 
"The Commission fully supports Greece in this endeavour. The measures announced today provide a strong signal of the readiness of the Greek Government to proceed with courageous decisions," Barroso said.
 
Jean Claude Juncker, who chairs the group of eurozone finance ministers, said that eurozone governments were now ready to take co-ordinated action to back the Athens government.
 
In Washington, the IMF welcomed Greece's "very strong" fiscal package to contain its massive debt crisis, saying that implementing the austerity measures would be critical.
 
"We welcome the substantial fiscal measures announced by the Greek authorities today. The authorities have put together a very strong fiscal package for 2010. The implementation of the fiscal program will be a crucial step forward in a multi-year process," Caroline Atkinson, Director of External Relations at the IMF, said on March 3.
 
"We also encourage the authorities to develop and implement soon significant reforms to boost productivity and growth, complementing the fiscal consolidation that is now underway. We stand ready to support the implementation of the authorities’ plans by sharing our technical expertise in these matters," Atkinson said.
 
In Sofia, Bulgarian National Bank vice-governor Roumen Simeonov said in an interview with Bulgarian-language mass-circulation daily 24 Chassa that the crisis in Greece and its banking system bore no risks to Bulgaria.
 
On the contrary, Bulgaria could even benefit by attracting more business, Simeonov was quoted as saying.
 
With the Greek government having to reduce salaries, limit state subsidies and increase taxes, by contrast the business climate in Bulgaria could look better from the point of view of taxes and interest rates on deposits, according to Simeonov.
 
Greek parent banks were more net contributors to their Bulgarian subsidiaries than net withdrawers, he said.
 
Bulgaria’s banking system as stable, as international financial organisations repeatedly had confirmed, according to Simeonov.
 
Financial daily Pari, quoted by Focus, said that managers of Greek banks and BNB officials had said that there had been no cash leakage from Bulgaria to foreign financial institutions.
 
Piraeus Bank Bulgaria said that Piraeus Group had made a strategic decision to keep its profits in Bulgaria and use it for capital increases and further development on the local market.