DEBT FINANCING. Greece says it will stay the course, despite the fall of GDP

Thessaloniki, Greece (Reuters)-the Government of Greece debt laden promised on Saturday to maintain the austerity course, sending a message to your creditors increasingly frustrated, he will do everything necessary to avoid a bankruptcy that would rock the euro.
Anger over the country's failure to meet budgetary targets in their rescue EU/IMF reached the boiling point, prompting senior eurozone politicians to cast doubt on its ability to avoid default or even membership of the single currency.
But Finance Minister Evangelos Venizelos cancelled the talk, telling your lenders that his Government remained fully committed to its bailout plan.
"We are absolutely determined, without any political cost, weighing fully to meet our obligations to our institutional partners," he said in a speech in the northern city of Thessaloniki.
Venizelos promised to cut the payroll of the civil service, privatization push and deepen the reform of the labour market.
"If these things don't change, we won't survive, we have no crisis," he told businessmen at a Conference.
Public officials, which have seen about a fifth of their salaries reduced, will suffer more after the Government decided to put thousands into a so-called "labour reserve" that will draw the 60% of his salary and possibly face dismissal does not find any other work of the public sector within one year.
"We must prove wrong those who say that Greece is unable or unwilling, or a pariah, or does not deserve to be in the euro," said Venizelos.
But austerity measures are throwing the economy into an increasingly deeper downturn. GDP will shrink by more than 5 percent this year, said Venizelos, surpassing earlier projections in its third straight year of contraction.
PUBLIC DISCONTENT
Recession is playing public discontent and thousands of disgruntled employees, students, taxi drivers and even football fans expected more Saturday afternoon March in Thessaloniki.
The protests are timed to coincide with a major economic policy speech by Prime Minister George Papandreou in Thessaloniki Trade Fair, the country's largest economic event.
Taxi drivers have called a strike of 12:0 am. Restaurant owners of Thessaloniki, said it would shut down on Saturday to protest a tax hike that went into effect earlier this month.
"We suffered an unprecedented tax raid ... we are deeply concerned about tomorrow," George Kasimatis, Federation of Chamber of Commerce President of Greece, Venizelos said during the Conference.
Police presence is felt throughout the city, with approximately 6,000 employees patrol the streets on foot or bike. Three people were arrested for transporting masks.
Papandreou, who was heckled by protesting in Thessaloniki, unionists from work on Friday, avoided traveling the Fairgrounds in the morning, as Prime Ministers usually do on the first day of the event.
While promising to keep its part of the agreement, the Greek Government strongly criticized their EU partners to postpone ratification of a second, rescue of 109 million euros to the country, agreed by the euro-zone leaders on 21 July.
"Europe must face the challenge and move toward the implementation of the decisions of 21 July, to end the suffering of Sissyphean the Greek people is going through," said Minister Mihalis development Chrysohoidis.
"Doing nothing is disastrous for us all," he added.
A G7 source said the troika (ECB/EU/IMF), which last week suspended the talks with Athens in frustration in Greece's fight to keep its deficit reduction plan, would probably come up with a form of words in his next report to allow the next installment of aid funds to pay.
But the working hypothesis is now that Greece will not prevent default indefinitely.
However, a plan of exchange for securities to private holders of securities, which is part of the second bailout plan and is supposed to facilitate payments of debt Greece was progressing well, said Venizelos.
"The private sector is responding very well to the PSI (involvement of the private sector)," he said without elaboration, a day after the expiration of a deadline for banks to express the interest of the regime.
(Additional reporting by Yannis Behrakis; Edited by Toby Chopra)

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