Greeks cutting back as EU and IMF help looms

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Athenians are tightening their belts following government austerity measures and most believe a potential euro zone and IMF aid deal will further erode living standards if Greece activates it, a survey showed today.

Struggling to rein in a huge budget deficit and a 300 billion euro (£260bn) public debt load, the socialist administration is slashing spending to halt a crisis that has caused investors to ditch its assets and has shaken the single currency.

Last month, the government cut the pay of about 600,000 public sector workers, froze pensions and raised taxes to reduce its shortfall in public finances this year by almost a third to 8.7 per cent of gross domestic product.

Half of those surveyed said their salaries no longer covered their needs. One third said they spent less on clothing and a quarter said they were not eating out as much, the poll, conducted in the capital by Athens Economics and Business University showed.

Seven out of 10 believed the aid deal, if tapped, would lead to a further deterioration of their living standards, while half said Greece's fiscal woes would last more than five years, according to the survey published in To Vima newspaper.

Athens has yet to ask to activate the euro zone and International Monetary Fund aid mechanism. But it has suffered a spike in borrowing costs that is threatening to thwart its deficit-reduction plan, and has asked to start talks with officials on Monday to discuss its details.

At an estimated value of 45 billion euros (£40bn) in the first year, the package would be the biggest multilateral bailout ever attempted. But the prospect of looking for outside help has angered many Greeks.

A poll yesterday showed most of the country's 11 million people were unhappy with the socialist government's performance, although they still supported it over the conservative opposition. Some 66 per cent believed social unrest would mount in the coming months.

Greece's most powerful trade unions have staged a series of strikes against the austerity steps since the start of the year and plan more this month. The civil servants union will down tools for 24 hours on April 22.