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Greek Prime Minister Georgios Papandreou depicts the economic situation of the country as a "nightmare" and admitted the immediate danger of bankruptcy, if more decisive measures to strengthen public finances are not undertaken. In a dramatic speech before the PASOK parliamentary group, he invited all Greeks to support the painful but necessary reforms: "In the last 5 months we are leading daily battles on all fronts. Not for tomorrow but for today, to save the country," he said.

This morning a meeting of the Cabinet will adopt additional measures for financial stabilization, and later, Papandreou will officially inform the country's president Karolos Papoulias. Then there will be a series of meetings with representatives of trade unions and employers in Greece. Additional measures include an increase in VAT by 2%, i.e. it will become 21 percent, increase in excise duties on cigarettes and alcohol by 20 to 30 percent, increase in excise duty on fuel and powerful cars, the introduction of so-called luxury tax on the ownership of luxury buildings, swimming pools, cars, yachts.

Regarding the big discussion about the cancellation of the 14^th salary for public employees the Prime Minister was certain: "Some are very concerned about the 13^th and 14^th salary today. I can assure you that if we do not introduce reforms right at this moment, very soon we will be unable to pay not 14^th but the fifth and sixth salaries. Sounds like a nightmare, but it's true.” Georgios Papandreou described as absolutely real the time at which Greece will not be able to obtain external financing, but will be hard pressed to pay any amounts for already taken loans in the past. "In this case the state will not be able to pay salaries and pensions, banks will close, there will be no loans, no citizens or entrepreneurs will be able to perform their duties,” said the Greek Prime Minister. "You elected us to solve the problem, not to comment on it," he said.

Papandreou reminded his party memebers that the situation in which Greece today has no parallel in its history. At the same time he announced that Greece's image in the international arena has been unfairly negative and only the Greeks can change it. "We need to show that we are able to put order in our house. We cannot expect citizens of other countries to make sacrifices to help us if we do not make sacrifices ourselves," said the PM.

The upcoming months will be shocking for all Greeks and especially the second half of 2010, analysts predict. “Tightening of belts" will be long term and will continue for at least ten years, they warn. VAT and excise duties increase will lead to a sharp appreciation of life in Greece, and especially the income of those employed in the public sector will be reduced by 30 to 40 percent. We do not provide reduction of 13^th and 14^th salary in the private sector, but it is possible employers or at least some of them will take advantage of the situation and request a reduction of income for private employees.

Further reforms will affect interests in many sectors and the country is facing a wave of strike protests. The next national strike was declared for March 16, meanwhile, yesterday and today taxi drivers are on strike, and on March 8 and 9 tax officials will be striking.