'Suffering' Greece must stay the course: EU parliament chief

(ATHENS) - Greeks "suffering" from two years of austerity cuts must meet reform pledges in order to keep receiving EU-IMF loans, European Parliament president Martin Schulz said on Friday.

But Schulz, a German Socialist, added that there were signs of a European policy change in favour of pro-growth policies after Francois Hollande's presidential victory in France, as he urged Athens to stay the course.

"No EU country will release the next installment of the 130-billion-euro rescue package unless the next Greek government adheres to the commitments that have already been made," he told an Athens audience on a one-day visit.

"Austerity measures and structural reforms cannot be circumvented," said Schulz, who recognised that Greeks are "suffering" after seeing the homeless of Athens and "people rifling through dustbins for something to eat".

"In my earlier trips to Athens I have never seen such scenes," he said.

The EU parliament chief flew in for a round of meetings with political leaders as the debt-laden country faces its second electoral campaign in six weeks after May 6 polls left it unable to form a government.

Schulz expressed "deep dismay" at the failure of attempts to form a coalition government after the inconclusive first election.

The Greek parliament is to be dissolved at 0600 GMT on Saturday and ballots are expected to be set again on June 17.

A radical leftist party, Syriza, that wants to tear up Greece's loan agreement with the European Union and International Monetary Fund, is expected to win, raising fears that promised reforms could be rejected.

Should that happen, Greece's euro membership could also be at stake.

Schulz on Friday insisted: "The EU wants to keep Greece in the eurozone."

But he castigated parties such as Syriza and other anti-austerity groups who made major gains on May 6 after telling voters that the bailout can be rejected without serious consequences for Greece's future.

"Those who say 'we don't accept the (loan agreement), but we will stay in the eurozone' nourish a fake hope," he said. "They promise relief, but in reality they will lead the country into devastation."