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Greek budget cuts spark protests

As Standard & Poor's downgrades Greece's debt, Prime Minister Papandeou vows to make painful cuts.

A protester marches in front of the temple of Zeus as he takes part in an anti-government rally called by communist labor group PAME in Athens, Dec. 17, 2009. (Yiorgos Karahalis/Reuters)

ATHENS, Greece — As the Greek government prepares to implement a host of austerity measures to bring the country’s massive public debt under control, this new year may be accompanied by the shouts of protesters rather than merrymakers.

Greek Prime Minister George Papandreou, in office for just over two months, acknowledges the country faces “painful” choices as it scrambles to assure international investors — and its European partners — that it will not default on its debt.

But in a country where generations of politicians have used state jobs and resources to curry political favor and mute social unrest, attempts to prune the country’s bloated civil service and cut social security spending are likely to meet stiff resistance.

“The employers should have to pay, not the worker,” said Eleni Nakri, an unemployed 30-year-old protesting the austerity measures outside Greece’s parliament on Thursday. “We’ve made enough compromises.”

The current crisis was sparked by the recent downgrading of Greece’s credit rating by two major debt-rating companies, Fitch Ratings and Standard & Poor’s, which raised fears that the country could default on its debts and potentially cause ripple effects across the 16-member eurozone. Greece’s public debt has reached $442 billion, according to government officials, the highest in its history and more than 112 percent of GDP.

But Greece’s new socialist government insists the country is no Dubai or Iceland and says it will not default or seek a bailout. On Monday, Papandreou said the country was in “critical condition,” but pledged to take tough action to address the crisis, including new taxes, slashing social security spending by 10 percent and freezing many public sector wages. He stopped short, though, of calling for public sector salary cuts.

Still, many of the new measures are likely to be unpopular. And in a country with a long and proud tradition of protest, many fear a long season of strikes and marches lies ahead.