EU: Greek Austerity is the 'Only Way' to Avoid Default

European Union economic affairs chief Olli Rehn pressed the Greek parliament on Tuesday to adopt a tough austerity program, saying it was the "only way to avoid immediate default."

"This week Greece faces a critical juncture. Both the future of the country and financial stability in Europe are at stake," Rehn said in a statement.

"I trust that the Greek political leaders are fully aware of the responsibility that lies on their shoulders to avoid default," he said.

"The only way to avoid immediate default is for Parliament to endorse the revised economic program."

Rehn slapped down speculation that Europe was working on a contingency plan in case Greek lawmakers this week reject 28.6 billion euros in budget cuts and tax rises as well as a 50-billion-euro privatization program.

"To those who speculate about other options, let me say this clearly: there is no Plan B to avoid default," he said.

A high-ranking European official has said that a Plan B was in the works, stressing that "the next step is not a default of Greece."

German Finance Minister Wolfgang Schaeuble said in a newspaper interview published on Sunday that the eurozone must be "prepared for the worst" and would cope even if Athens defaulted on its debt.

Rehn reiterated that passing the austerity measures was a pre-condition for the EU and IMF to release 12 billion euros from last year's 110-billion-euro bailout, which Athens needs by July to avoid financial collapse.

"They must be approved if the next tranche of financial assistance is to be released," he said.

"The European Union continues to be ready to support Greece. But Europe can only help Greece if Greece helps itself," he said.

Angry workers launched a 48-hour general strike on Tuesday to protest the measures, which the parliament is scheduled to vote on Wednesday and Thursday.

Socialist Prime Minister George Papandreou, who has a five-seat majority in parliament, pleaded on Monday with lawmakers to back the measures, but the conservative opposition has criticized the plan.

Eurozone finance ministers are holding a special meeting on Sunday, awaiting to see the result of the Greek vote before deciding on unblocking the loans and devising a second bailout requested by Papandreou, which could also amount to 110 billion euros.

"The preparation of a new program will intensify in the coming weeks," Rehn said.