The Greek Prime Minister says that “social partners” (unions, employers, etc) need to launch a new deal in order to save the country. Greece does not have much time and must take tough decisions within the next three months that have not been taken in decades.

Greece is in critical condition and has become an easy target for speculators. We must change or sink, he says.

EUR/USD is pulling back slightly in the wake of the sobering comments. It trades at 1.4655.

Update: Papandreou says that the major problems are how national wealth is handled, corruption and tax evasion. Greece’s biggest deficit is credibility, he says.