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Greece 'not looking for scapegoat,' PM says

By Melissa Gray, CNN
Greek Prime Minister George Papandreou speaking at the European Parliament Thursday.
Greek Prime Minister George Papandreou speaking at the European Parliament Thursday.
STORY HIGHLIGHTS
  • Greece needs strong political support for its austerity measures, Papandreou said.
  • The government has introduced $6.5 billion in cuts and tax increases
  • Protesters want more of the restructuring measures aimed at the wealthy
  • Greece aims to reduce its 12.7 percent budget deficit to 8.7 percent this year

(CNN) -- Greece wants to take responsibility for its budget crisis and is not looking for outside financial help, its prime minister said Thursday.

"We're not asking for help as some reckless country just wanting to live off the wealth of others," George Papandreou told the European Parliament in Brussels.

"We're not asking for money from the Germans, the French or the Italians, or other workers or the taxpayers."

All Greece needs, he said, is strong political support for the austerity measures its government passed last week, which Papandreou called the most servere in the nation's modern history.

The measures total $6.5 billion in spending cuts and tax increases that include slashing civil servants' salaries, increasing the value-added tax, and freezing pensions.

"We've taken these measures not only to save our economy, but to prove that there is the necessary political courage, the necessary political credibility of our country, but also because we believe we are part of a community -- the European Union community," Papandreou said.

The prime minister spoke a week after thousands took part in nationwide strikes over the fiscal measures.

"It's a difficult, painful crisis, but we are making it an opportunity for major changes -- for a more just tax system, for a better competitive economy, for an economy which I think we can all be proud of, both we Greeks and Europeans," Papandreou said.

People support the measures even though they are difficult, he said.

"Anyone you talk to, they say we need to change," Papandreou said.

Papandreou hit back at the suggestion this week from German Chancellor Angela Merkel that the European Union must be able to expel countries from the euro zone if they fail to live up to their responsibilities.

"Simply punishing may not be the solution," he said. "In the end, punishment and kicking someone out is a failure not only of that country, but it's a failure, in the end, of the European Union."

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The Greek government revealed late last year that its budget deficit was 12.7 percent of its gross domestic product, far exceeding the European Union limit of 3 percent. Countries participating in the EU must agree to that condition and other economic goals.

Greece aims to reduce that deficit to 8.7 percent this year and reach the EU target by 2012.

Earlier this week, Olli Rehn, the European commissioner for economic and monetary policy, said Greece is now on track to meet its deficit reduction target for this year.

"Greece's ambitious program to correct its fiscal imbalances is now on track. Correcting these imbalances and restoring competitiveness is essential to put Greece back on a sustainable path," Rehn said. "However, we are certainly not yet out of the woods."

Rehn repeated previous assurances from European officials that the European Union will step in to help Greece if needed.

Papandreou said Greece is not looking for financial help, but he did say that European bailouts of failed banks had contributed to Greece's current problems.

"Our people's tax money -- our tax money -- bailed out these banks and yet now they are hitting us for the deficit we accrued in order to bail them out. And our people are paying for this," he said.