- Associated Press - Monday, June 6, 2011

ATHENS — Greece’s prime minister embarked on a drive Monday to push new austerity plans through Parliament despite increasing dissent within his party and big demonstrations in the country’s two largest cities.

The austerity plans — remedial measures this year and a package through 2015 — are required if Greece is to continue getting money from last year’s $160 billion package of rescue loans from the International Monetary Fund and other countries that use the euro. Greece looks as if it will need more money to cover a funding gap next year and to prevent the country from defaulting on its debts.

On Monday, Prime Minister George Papandreou’s talks with his ministers at an informal Cabinet meeting were the first of a series of meetings. On Tuesday, he is to present the plans to deputies from his governing Socialist party before the Cabinet reconvenes Wednesday to decide on sending the measures to Parliament.

Last week, debt monitors from the European Union and IMF said Greece should receive the next $12 billion installment of the bailout in early July as long as additional austerity and privatization measures are deemed sufficient. A final decision is to be made by the IMF board and the eurogroup in meetings later this month.

But the extra austerity measures have discouraged members of the governing PASOK party, which has a majority of only six seats in the 300-member Parliament.

Last week, 16 PASOK deputies signed a letter demanding an extensive debate on the measures before they are ratified, while one of the signatories threatened not to vote for the reforms otherwise.

A government official with knowledge of Mr. Papandreou’s talks said the government would have to listen to the dissenting views. However, he said Greece’s European partners want to see “steady action at a fast pace.”

The measures will include tax increases, spending cuts and trimming the size of the bloated public sector. The government also is pushing through an ambitious $72.8 billion privatization program.

The ever-increasing cutbacks also have led to a public backlash, with tens of thousands of Greeks flooding into the main squares of cities across the country in a protest fueled by appeals on social media that is now in its second week.

Sunday, the 12th straight day of protests modeled on similar demonstrations in Spain last month, saw the largest gatherings so far. More than 60,000 people jammed Athens’ main Syntagma Square, according to police estimates, although protesters claimed the numbers were much higher. Another estimated 20,000 people rallied in the second largest city of Thessaloniki in the north.

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