Papademos to Ministers: Back Bailout or Quit

Protesters shout anti-austerity slogans outside the Greek Parliament in Athens, Friday, Feb. 10, 2012. Thousands took to the streets of Athens as unions launched a two-day general strike against planned austerity measures on Friday, a day after Greece's crucial international bailout was put in limbo by its partners in the 17-nation eurozone. (AP Photo/Petros Giannakouris)

Greek Prime Minister Lucas Papademos told members of his government they must back deeper budget cuts needed to prevent financial collapse or quit, as political dissension threatened to unwind the country’s second bailout.

Papademos said failure to secure the 130 billion-euro ($171 billion) rescue package that’s under negotiation threatened 11 million Greeks with a default that would halt the payment of wages and pensions and shut down schools, hospitals and businesses. He spoke after five ministers resigned in two hours and protesters clashed with police in Athens.

“Some say default would be preferable,” Papademos told a Cabinet meeting in Athens this evening, according to an e-mailed transcript from his office. “They are woefully mistaken. What is of the essence right now is to do whatever we can to approve the new plan and let the loan accord proceed.”

Full story: Papademos to Ministers: Back Bailout or Quit