Greece's Defence Minister on Thursday promised “colossal” cuts in military operating costs to help the debt-ridden country emerge from its financial crisis and speed up plans to modernise the armed forces.
Defence Minister Evangelos Venizelos Greece is aiming to slash operating costs by up to 25 percent in 2010 from 2009, instead of the planned reduction of 12.6 per cent listed in this year's budget.
“That is a colossal amount, reaching the margin of our operating needs,” said Mr. Venizelos, insisting that the cuts were not a direct result of the Greek debt crisis, nor would affect the strategic balance with historic rival Turkey. Turkish Prime Minister Recep Tayyip Erdogan is to visit Athens next month.
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Greece remains at odds with neighbour and NATO ally Turkey over the divided island of Cyprus and boundaries in the Aegean Sea but has improved ties over the past decade.
Athens is currently in talks with the European Union and IMF for a rescue package worth €45 billion ($60 billion) this year, and more for the following two years, to cope with its acute financing crisis that has brought it to the brink of default. The prospect of a deal eased massive pressure on Greece in the bond markets and saw shares on the Athens Stock Exchange rebound strongly after days of heavy losses.
But unions, angry at the prospect of more austerity measures are planning a general strike on May 5 as part of a renewed protest campaign. Officials have been reluctant to say what measures are being discussed before the bailout talks are concluded.
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“It is certain that all these measures and decisions are painful,” said government spokesman Giorgos Petalotis, who promised that the measures would be “socially just”.
“Today, the challenges we face are very large,” he said.
But a source in a meeting between Prime Minister George Papandreou and labour union leaders on Thursday said Athens was being asked to abolish the 13th and 14th salaries — known as holiday bonuses — in the public sector. Greeks have their annual salaries divided into 14 instead of 12 monthly instalments.