Athens: Greece`s most influential think tank warned on Thursday of a social crisis unless the government takes rapid action to repair the damaged economy, including unpopular austerity measures.
It urged the socialist government to move faster in applying tough fiscal measures while its approval rating was high, to avoid public unrest later.
"Conditions require immediate action and drastic measures," said the IOBE economic think tank. "If the negative developments are not reversed ... the economic crisis risks becoming a social crisis."
The warning, made in an open letter to the Prime Minister, came as the government struggles to contain the worst economic crisis in decades, which is shaking the euro currency and was sparked by the biggest budget deficit in the euro zone.
Analysts have said that social unrest could pose the biggest risk to the Socialist government`s efforts to cut spending -- Greece`s two biggest trade unions are planning 24-hour strikes next month.
The country also remembers well last year`s riots, when rioting sparked by the police killing of a teenager and fuelled by high youth unemployment closed sections of central Athens for several weeks.
IOBE said failure to repair public finances and boost the country`s competitiveness would "lead the economy into a deep recession and huge unemployment."
Unemployment rose to 9.8 percent in October from 7.4 percent a year earlier as the country faced its first recession in 16 years.
Bureau Report
