Greek opposition rejects new cuts but won't force poll

PARIS (Reuters) - Greece's opposition leader denounced international lenders' demands as dealing the "final blow" to a devastated economy but said on Friday he would not seek to bring down the government.

Alexis Tsipras, head of the far-left Syriza party, said cuts to wages and welfare payments in a package the government agreed with the European Union and International Monetary Fund would pile misery on Greeks enduring a fifth year in recession.

Tsipras, a 38-year-old former student Communist, said his party would vote against the package expected to go before parliament next week, and called on members of the ruling coalition to break ranks and do the same.

"If these measures are implemented, it will be the final blow for the Greek economy," he told Reuters in an interview, noting that economic output had already shrunk by a quarter over the past five years, leaving one in four Greeks out of work.

"We have never seen anything like it in modern European history in a country at peace. Greece is like a country ravaged by war."

Athens has been locked in talks for months with its coalition allies and international lenders on the 13.5 billion euro ($17.5 billion) austerity package required to secure the next tranche of the bailout and avert bankruptcy.

A deal appeared to have been finalized this week but, in a setback to conservative Prime Minister Antonis Samaras, a junior partner in his coalition said it would vote against labor reforms demanded by foreign lenders.

Syriza has been the main beneficiary of a wave of anger unleashed by the crisis against Greece's traditional parties, conservative New Democracy and center-left PASOK, which ruled the country since a military dictatorship ended in 1974.

It won 27 percent of the vote in June's election to become the second-largest force in parliament behind New Democracy. A poll this month said that if elections were held today, Syriza would become the largest force, with 30.5 percent of the vote.

Despite their strong position, members of Syriza would not push Greece to fresh elections by resigning their parliamentary posts next week, said Tsipras, who was in Paris for a meeting of European left-wing parties.

"Our top priority is to overturn this policy. It is not a time for tricks, it is not a time to provoke the fall of the government," he said, adding his party would continue to oppose austerity measures from the parliamentary benches.

NO GREXIT

Tsipras said he had no desire to see Greece exit the euro zone but the government and its European partners had to recognize that the country could not afford to pay its debt.

"Greece is already bankrupt, it's just that its banks have not been allowed to go fold because the entire European banking system would be threatened with bankruptcy," he said.

Thorough economic reform would require the nationalization of the entire banking system, which had bankrolled traditional political parties, Tsipras said.

Slavishly repaying Greece's debt risked turning the country into a "colony of Germany and other powerful euro zone countries", Tsipras said.

"We risk the ruin of the European ideal: a Europe split into north and south. The only way of this idea surviving is through solidarity," he said, calling for a European "Marshall Plan" whereby rich countries would invest in poorer ones.

If other indebted euro countries such as Spain followed Greece along the path to severe austerity, it could encourage extremists such as Greece's Neo-Nazi Golden Dawn movement. "What we are seeing now in Greece will happen in one or two years in those countries," he said.

Tsipras said he was disappointed by the lack of support for Greece from Europe's left, notably France's Socialist President Francois Hollande who was elected in May with a pledge to push back German-led austerity in the euro zone.

"We expected more of Francois Hollande," Tsipras said, adding the French leader had not taken a stand against German Chancellor Angela Merkel. ($1 = 0.7733 euros)

(This story corrects sixth paragraph to show figure relates to latest austerity package)

(Additional reporting by Pauline Mevel; Editing by Ruth Pitchford)

Source: http://news.yahoo.com/greek-opposition-rejects-cuts-wont-force-poll-175107226--business.html

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