Greek government secures parliament majority to pass harsh austerity bill


The Greek parliament approved on Monday a deeply unpopular austerity bill to secure a second bailout from the European Union and International Monetary Fund and avoid a messy default.
The bill sets out 3.3 billion euros ($4.35 billion) in wage, pension and job cuts for this year alone.

Before the parliamentary vote, serious violence broke out on the streets Athens and spread to other Greek towns and cities, including on the holiday islands of Corfu and Crete.

Historic cinemas, cafes and shops went up in flames in central Athensas more than 100,000 protesters marched to parliament to rally on the harsh austerity measures demanded to keep the country solvent and within the eurozone.

As parliament prepared to vote on a new 130 billion euro bailout to save Greece from a messy bankruptcy, the buildings engulfed in flames and huge plumes of smoke rose in the night sky, according to Reuters.

The air over Syntagma Square outside parliament was thick with tear gas as riot police fought running battles with youths who smashed marble balustrades and hurled stones and petrol bombs.

Since May 2010, Greece has survived on a $145 billion (€110 billion) bailout from its European partners and the International Monetary Fund. When that proved insufficient, a new rescue loan package worth a further $171 billion (€130 billion) was decided - combined with a massive bond swap deal that will write off half the country’s privately held debt.

But for both deals to materialize, Greece has to persuade its deeply skeptical creditors that it has the will and ability to implement spending cuts and public sector reforms that will end years of fiscal profligacy and tame gaping budget deficits.

Protesters set bonfires in front of parliament and dozens of riot police formed lines to try to deter them from trying to make a run on parliament. Clouds of tear gas drifted across the square in front of parliament. Many in the crowd wore gas masks and had their faces covered, while others carried Greek flags and carried banners. Several protesters and police have been injured, while an unspecified number of suspected rioters were detained, authorities said.

Riot police fired dozens of tear gas volleys at rioting youths, who attacked them with firebombs, fireworks and chunks of marble smashed off the fronts of luxury hotels, banks and department stores. Streets were strewn with stones and rubble, while terrified passers-by sought refuge in hotel lounges and cafeterias.

Prime Minister Lucas Papademos’ government - an unlikely coalition of the majority Socialists and their main foes, the conservative New Democracy - was expected to carry the vote, even by a narrow margin.

Combined, they control 236 of Parliament’s 300 seats, although at least 20 lawmakers from both main parties said they would not back the new private sector wage cuts, pension reductions and civil service layoffs dictated by the draft austerity program.

Finance Minister Evangelos Venizelos told parliament that the alternative to the international bailout - bankruptcy and a departure from the euro zone - would be far worse for Greeks.

“The choice is not between sacrifice and no sacrifices at all, but between sacrifices and unimaginably harsher ones,” he told a stormy debate expected to run well into the night.

“The question is not whether some salaries and pensions will be curtailed, but whether we will be able to pay even these reduced wages and pensions,” he added. “When you have to choose between bad and worse, you will pick what is bad to avoid what is worse.”

The new cutbacks, which follow two years of harsh income losses and tax hikes - amid a deep recession and record high unemployment - have been demanded by Greece’s bailout creditors in return for a new batch of vital rescue loans.

“By Wednesday, finance ministers from eurozone countries must finally approve the financing and support program for Greece,” Venizelos said. “If that does not happen, and it is not at all certain that it will happen unless we raise to the occasion, then we will not be able by Friday, Feb. 17, to officially start the bond exchange process.”

“We won’t be in time to carry out the bond swap by March 5, and we won’t be in time to address the problem of major bond issues that must be paid from March 14-20,” he said. “If that doesn’t happen, the country will go bankrupt.”

The parliamentary debate started shortly after 3:30 p.m. (1330 GMT; 8:30 a.m. EST), and will take about 10 hours, finishing around midnight.

“By midnight today, before markets open, parliament must send the message that our nation is both willing and able,” Venizelos aid. “Unfortunately, the markets have subjugated states.”

German Finance Minister Wolfgang Schaeuble was quoted as telling the Welt am Sonntag newspaper Sunday that Greece “cannot be a bottomless pit.”

“That’s why the Greeks must finally put a bottom in,” he added. “Then we can put something in too.”

Highlighting previous promises he said weren’t kept, Schaeuble said “that is why Greece’s promises aren’t enough for us any more,” according to the report.

Asked whether Greece has a long-term future in the eurozone, Germany’s vice chancellor told ARD television “that is now in the hands of the Greeks alone.”

Philipp Roesler said in the interview broadcast that what matters is not just Greece making pledges.

“We want ... the Greek parliament also to approve laws and, as far as possible, take the first steps to implement what has been agreed,” he said.

“Only when that happens, only then can there be new aid - and Greece urgently needs that,” said Roesler, who is also Germany’s economy minister.

Roesler acknowledged that Greece faces “difficult decisions” but stressed that Germany wants it to be able to get out of trouble.

“It is not enough just to give financial aid - they must tackle the second cause of the crisis, the lack of economic competitiveness,” he said. “For that, they need ... massive structural reforms. Otherwise Greece will not get out of the crisis.”

Introducing the legislation Sunday, Socialist lawmaker Sofia Yiannaka said the intense pressure from Greece’s EU partners to pass the measures was the result of delays in implementing already agreed reforms.

“The delays have our imprint. We should not blame foreigners for them,” she said.

“We have finally found out that you have to pay back what you have borrowed ... We used to say ‘poor state, but rich citizens’ because we tolerated tax evasion for populist reasons. Is this the country we want?” Yiannaka added.

Leftist parties and the small rightist LAOS - a former junior coalition partner - have vowed to vote against the new austerity.

“You are not trying to save Greece, but a handful of industrialists,” Communist Party spokesman Thanassis Pafilis said. “And you disgracefully blame the struggling people who created the wealth we have. You are trying to send them back to the Middle Ages. We will not allow it.”