November 8, 2012

Greek austerity bill just passes

The measure was seen as necessary for the coalition government to avert immediate bankruptcy.

Deutsche Presse-Agentur

ATHENS, Greece - The national parliament narrowly passed a crucial austerity bill late Wednesday as violence rocked Athens with tens of thousands protesting the measures that threaten to further erode the standard of living for poor and middle class Greeks.

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Rioting youths clash with police dispensing tear gas near the Greek parliament Wednesday when the nation’s fragile coalition government approved of budget cuts that, among other things, will lead to tax increases as well as further reductions in pensions and salaries.

The Associated Press

Passage of the bill with 153 votes in the 300-seat parliament was a major hurdle for the coalition government to secure continued funding from its international lenders and avert immediate bankruptcy.

For the more than 70,000 protesters who defied heavy thunderstorms outside parliament, the bill will mean a further blow to the economy, which is about to enter a sixth year of recession with unemployment at a record 25 percent.

Hundreds of hooded youths hurling Molotov cocktails and chunks of marble clashed with police, who responded with tear gas.

"They have already cut my pension from 2,250 euros ($2,870) to 1,250 ($1,595), and now I risk even further cuts. They do not understand that on this pension I am supporting my wife and three unemployed children," said Grigoris Vasiliou, 70, a retired banker.

Parliamentarians passed the budget cuts worth $17.2 billion with heavy dissent from within the three-party governing coalition against further reductions to pensions and salaries along with tax hikes.

Two of the coalition parties, the conservative New Democracy and socialist PASOK, expelled a total of seven dissenting deputies from their ranks for voting against the bill.

Ahead of the vote, Prime Minister Antonis Samaras said Greece must decide whether to stay in the eurozone or return to the drachma. "Today we face the most critical decision any government has taken in the past 37 years," he told parliament.

Lawmakers needed to approve the package agreed to with Greece's international lenders -- the European Commission, European Central Bank and International Monetary Fund -- for the government to continue receiving bailout loans.

The next loan installment of $40 billion is long overdue. Without it, Greece is slated to declare bankruptcy on Nov. 16.

The measures include additional pension and public-sector cuts and tax hikes, a two-year increase in the retirement age to 67 and legislation that will make it easier to sack civil servants.

Ferry and train services have been canceled until Thursday, and flights were affected by a four-hour work stoppage by cabin crew.

 

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