European Union economic affairs chief Olli Rehn urged the Greek parliament today to adopt a tough austerity programme, saying it was the 'only way to avoid immediate default'.
'This week Greece faces a critical juncture. Both the future of the country and financial stability in Europe are at stake,' Rehn said in a statement.
'I trust that the Greek political leaders are fully aware of the responsibility that lies on their shoulders to avoid default. The only way to avoid immediate default is for Parliament to endorse the revised economic programme,' he said.
Greek austerity is the 'only way' to avoid default - Rehn
European Union economic affairs chief Olli Rehn urged the Greek parliament today to adopt a tough austerity programme, saying it was the 'only way to avoid immediate default'.
'This week Greece faces a critical juncture. Both the future of the country and financial stability in Europe are at stake,' Rehn said in a statement.
'I trust that the Greek political leaders are fully aware of the responsibility that lies on their shoulders to avoid default. The only way to avoid immediate default is for Parliament to endorse the revised economic programme,' he said.
Rehn slapped down speculation that Europe was working on a contingency plan in case Greek lawmakers this week reject 28.6 billion euros in budget cuts and tax rises as well as a 50-billion-euro privatisation programme.
'To those who speculate about other options, let me say this clearly: there is no Plan B to avoid default,' he said.
A high-ranking European official, speaking on condition of anonymity, has said that a Plan B was in the works, stressing that 'the next step is not a default of Greece.'
German Finance Minister Wolfgang Schaeuble said in a newspaper interview published on Sunday that the euro zone must be 'prepared for the worst' and would cope even if Athens defaulted on its debt.
Rehn reiterated that passing the austerity measures was a pre-condition for the EU and IMF to release €12 billion from last year's €110 billion bail-out, which Athens needs by July to avoid financial collapse. 'They must be approved if the next tranche of financial assistance is to be released,' he said.
'The European Union continues to be ready to support Greece. But Europe can only help Greece if Greece helps itself,' he said.
Euro zone finance ministes are holding a special meeting on Sunday, awaiting to see the result of the Greek vote before deciding on unblocking the loans and devising a second bailout requested by Papandreou, which could also amount to €110 billion.
'The preparation of a new programme will intensify in the coming weeks,' Rehn said.
48-hour general strike begins
Greece ground to a halt today as angry workers launched a 48-hour general strike against an austerity drive ordered by its government in exchange for a European bail-out.
Crowds converged early on Syntagma Square, where parliament will vote on sweeping spending cuts as planes, ships and most public transport came to a halt.
The number of police in the centre of the capital rose to 4,000, according to the authorities, with traffic unable to circulate in central Athens.
Public transport was halted in Athens for the fourth general strike called this year by the country's two biggest unions, with the exception of the metro whose drivers decided not to strike so as to allow Athenians to swell protest numbers.
In the port of Piraeus, near Athens, which links most Greek islands with the mainland as the peak tourist season gets under way, around 200 trade union members staged a picket to prevent ferries from leaving the port.
Banks, too, were closed and even hospitals were operating on reduced staffing while at airports action by air traffic controllers saw domestic flights cancelled by Greek airlines Olympic Air and Aegean and international departures delayed.
