Greeks warned of austerity measures ahead

Greek Prime Minister George Papandreou has warned the country to be prepared for a new round of austerity measures.

"The measures we must take, which are economic measures, are necessary for the protection of our country," said Mr Papandreou.

It comes as the European Union (EU) discusses details of an emergency plan to help tackle Greece's crippling debt.

Eurozone finance ministers have been holding conference calls to discuss the crisis this weekend.

Greece's education minister, Anna Diamantopoulou said the "final result" of the negotiations between Greece, the International Monetary Fund (IMF) and the EU would be announced on Sunday.

Details of a new series of cuts and tax rises are expected to be demanded of Greece after the completion of negotiations over the size and detail of therescue package for the country.

The Greek government says it needs a loan deal by 19 May to avoid a devastating debt default.

A major concern has been the German portion of the rescue package. Ahead of a crucial regional election on 9 May, pressure had been mounting on Chancellor Angela Merkel to involve private banks and companies in the bail-out fund.

Now it appears that a grouping of German banks and other companies are prepared to assist in the bail-out payments. The move has not yet been confirmed by the parties involved, but movement is expected over the weekend.

Public opinion and politicians across the political spectrum had opposed the idea that the entirety of the bail-out would be funded by taxpayer money.

On Friday, Greek Prime Minister George Papandreou told the country's parliament that the pain he was about to inflict on the nation, as part of the conditions of obtaining the bail-out cash, was necessary so "we can stand firmly on our feet".

"It is a patriotic duty to undertake this, with whatever political cost, which is tiny faced with the national cost of inaction... and indecision," he said.

The government is not releasing details of its mooted programme yet, and is probably waiting until after the annual May Day demonstrations.

But there have already been angry protests over what might be contained in the forthcoming austerity packages, with demonstrations on Thursday evening outside the Greek finance ministry.

Any further austerity measures would be in addition to an already-proposed drive aimed at reducing the nation's public deficit, which is more than four times bigger than the EU limit.

Union officials claim that as part of the new tranche, the IMF wants Athens to raise sales taxes, scrap bonuses amounting to two extra months of pay in the public sector, and accept a three-year pay freeze.

The union officials also claim that by next year, the IMF and the EU want Greece to shed 10 percentage points from the public deficit that reached 13.6% of output in 2009.

It was also reported in the Financial Times in London on Friday that another measure would include raising the retirement age from an average of 53 to 67.

"Have you understood that these measures that are being recommended to you are measures of destruction?" the head of the Left Coalition Syriza, a small left-wing party, Alexis Tsipras, asked Greek Prime Minister George Papandreou and fellow lawmakers.

"There is no other choice, ask for the verdict of the Greek people, call a referendum," he added.

In the face of mounting opposition to the budget cuts, Mr Papandreou insisted that the poor must not suffer disproportionately because of the austerity drive.

"We are holding tough negotiations to protect what we can for the weak and the middle class in our country," he said.

He said spending on healthcare would continue, but that corruption in the sector would be tackled.