Greece says can't take any more austerity, will not be 'blackmailed'

By George Georgiopoulos

ATHENS | Mon Oct 28, 2013 11:25am EDT

(Reuters) - Greece's president used an annual commemoration of the country's stand against fascism in World War Two on Monday to warn that Athens would not yield to pressure from foreign lenders to impose more austerity.

The blunt comments by President Karolos Papoulias - a former World War II resistance fighter who holds a ceremonial but revered post - come as Athens finds itself at odds with its EU/IMF lenders over budget savings to hit targets under its second bailout.

At an annual military parade in Thessaloniki, northern Greece, marking the rejection of Italy's ultimatum to Greece to surrender in 1940 - one of the most symbolic events in Greece's political calendar - Papoulias said Greeks today were as firm in the face of crisis as they were then and would not give in to what he called foreign "blackmail".

"We are honouring today the dead of this great battle against the cholera of fascism, the Italian fascism of 1940," Papoulias told reporters after the parade.

"Greeks gave their blood and whatever they could (in 1940) and today have given what they could to overcome the crisis. This must be appreciated by Europe. Greek people cannot give anything more," he said.

"They should not think that we may yield to blackmail. Greek people have never surrendered to blackmail," Papoulias said, without elaborating.

The national holiday commemorates the day when then Greek Prime Minister Ioannis Metaxas rejected a demand from Italian dictator Benito Mussolini to allow his troops to be deployed in Greece. The holiday is known as Ohi Day, or "No Day", in Greek.

Greece has been kept afloat by an EU/IMF lifeline since 2010, with 240 billion euros of loans granted in exchange for spending cuts and reforms.

But austerity fatigue has set in after a six-year recession that wiped out 40 percent of household disposable incomes and sent unemployment soaring to almost 28 percent.

Greece's coalition government is rejecting any across-the-board wage and pension cuts or tax increases, arguing it deserves some slack after delivering the biggest budget deficit reduction ever recorded in the euro zone.

The EU/ECB/IMF troika, due back in Athens on November 4 to check on the country's performance, fears that without new measures Greece will miss a targeted primary budget surplus, excluding debt servicing outlays, next year.

Lenders see Athens falling short of achieving a primary surplus of 1.6 percent of gross domestic product (GDP) by about 2 billion euros but the government expects the shortfall will be around 500 million euros.

In 2011, Greeks protesting at austerity measures demanded by foreign lenders blocked the parade, shouting "traitors" at the president and other officials.

There were minor protests at parades in other Greek cities in Volos and Heraklion in Crete on Monday, where some plastic water bottles were thrown at officials, police said.

(Editing by Susan Fenton)