ATHENS, Greece — With creditors demanding solutions to the Greek debt crisis and the financial world increasingly on edge, Athens on Wednesday froze pensions, cut civil-service salaries and slapped new taxes on everything from cigarettes and alcohol to fuel and precious gems.
Markets and the European Union reacted well to the $6.54 billion austerity plan. But Greek unions were outraged — and the country’s embattled premier, who had likened the situation to a “state of war,” is headed to Germany and France seeking more definite expressions of support.
Prime Minister George Papandreou warned that unless the new measures won European Union and market backing, bringing down the cost of borrowing for the country, Greece would turn to the International Monetary Fund.
Such a move would be unpalatable for the European Union, highlighting the bloc’s inability to manage the crisis on its own.
“From today, the problem can’t be considered ‘Greek.’ We are doing what we must and more,” Papandreou said. “So now, it is the time of Europe.”
If the EU and the markets don’t respond “as we would wish, because of speculative behavior, our last resort would be the International Monetary Fund.”
Greece is already receiving technical help from the IMF but has not yet appealed for a bailout. The IMF has bailed out EU members Hungary, Romania and Latvia, as well as nonmembers Iceland, Ukraine, Bel arus and Serbia — but never a member of the euro zone.
