Eurozone bailout will not end Greece's pain

ECONOMIC GLOOM

The Greek coalition government, which groups the two main political parties, pledged to cut the minimum wage 22 percent and to dump 15,000 jobs in the country's public sectors by the end of this year.

It also promised to further trim its 325-billion-euro (425 billion-dollar) national budget during its 2012 debt-restructuring plan.

However, this won't help the country's flatlining economy, which, according to official figures released last week, dropped at a 7-percent annual rate in non-seasonally adjusted terms in the fourth quarter of 2011.

If previous forecasts of a 6 percent contraction for all of 2011 prove true, it will be the fourth consecutive year of economic decline in Greece.

In October, the Greek government was asked to reduce its debt from the current 160 percent of annual economic output to about 120 percent by 2020.

However, according to international observers, the government has failed to tackle the economy's slide since it was hit by the sovereign debt crisis.

What's more, they said, harsh austerity measures demanded by Greece's so-called troika of foreign lenders -- the International Monetary Fund, the European Commission and the European Central Bank -- would to some extent further hammer the country's economy.

DIVIDED COALITION GOVERNMENT

The Greek coalition government remains widely divided, although leaders of the two main parties, the socialist Pasok party and the conservative New Democracy party, urged their deputies to back the austerity bill.

The two coalition parties expelled more than 40 lawmakers for not supporting the bill, proving the claims made by socialist George Papandreou and conservative Antonis Samaras that dissenters were not welcome in the parties.

George Karatzaferis, leader of the right-wing Popular Orthodox party, said he did not back the tough terms attached to the bailout.

Later, all four cabinet members from the party resigned and two other members, both socialist deputy ministers, also quit the government.

Prime Minister Lucas Papademos might reshuffle the cabinet in the coming days, analysts said, citing the possibility the dismissed legislators might form a new political party.