Greek PM Says Default Would Lead To "chaos"

Published February 10, 2012 6:27PM (EST)

ATHENS, Greece (AP) — Greece's prime minister is promising an end to the country's recession next year and better-than-expected budget figures in 2012 if crucial debt-relief deals are accepted.

Lucas Papademos said the euro130 billion ($170 billion) new bailout and a related debt-reduction deal with private creditors would help Greece deliver 4.5 percent primary surplus in 2012 — better than an earlier official prediction of 1.1 percent of gross domestic product.

Papademos called an emergency Cabinet meeting Friday to face down dissent with in his coalition government against new austerity measures. He warned that disorderly default would trigger "economic chaos and a social explosion."

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

ATHENS, Greece (AP) — Greece's prime minister has promised to "do everything necessary" to rescue a euro130 billion ($170 billion) bailout deal, after six members of his cabinet walked out over harsh new austerity measures, triggering a political crisis in the near-bankrupt country.

In a televised address Friday, Prime Minister Lucas Papademos said senior members of his government would be expelled if they oppose the austerity program, due to be voted in parliament late Sunday.

Earlier Friday, a small right-wing party in Papademos' coalition said it would not back the new measures and four of its officials in the cabinet resigned.

By Salon Staff

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