Greek PM says austerity pain must be shared

Greek Prime Minister George Papandreou said yesterday his government is ready to confront social tensions caused by draconian spending cuts enforced to counter its debt crisis.

With the euro currency under new pressure over worries on Greece and other European nations, Mr Papandreou and Finance Minister George Papaconstantinou held a new round of meetings at the World Economic Forum in Davos seeking to reassure the international community.

Reaffirming his determination to cut the 12.7 per cent budget deficit, the Prime Minister acknowledged the country's troubles over the past year including serious riots in Athens before his socialist Pasok party won an election.

"The riots that we had last year were at the height of the scandals in our political life," he said.

"Banks were being bailed out then, there was corruption and there was no legitimacy in the political system. We have re-established legitimacy and there is great support for us even from the younger generation."

Mr Papandreou said: "It is important that whatever we do, it is seen as just. It may be painful but it must be seen that we are all paying for the burden." And he insisted that the government would protect the unemployed.