Greece Adopts Austerity Package Amid Violent Clashes

June 29, 2011
Government approves measures to release emergency funding from the EU and IMF; strike continues.

Greek lawmakers on Wednesday voted for a massive new austerity package demanded by international creditors, amid violent clashes between protesters and police firing tear gas outside the parliament.

An AFP count gave Prime Minister George Papandreou's government the 151 votes it needed to push through measures to save 28.4 billion euros ($40 billion) by 2015, and so unlock emergency finance from the EU and the IMF.

The yes vote was "the only way to buy time and start the great changes this country needs," Papandreou said in the moments before voting, pledging to do "everything to avoid the collapse of this country," with the plans deemed essential to prevent default on its 350 billion euro debt mountain.

Papandreou's Socialists lost one vote among their 155 lawmakers, as expected, but also won backing from one opposition MP.

A second vote on the detail behind the measures has to be held on Thursday.

'There Is No Plan B'

As clashes between protesters and police rocked the streets outside the parliament for a second day, Papandreou admitted "there is no Plan B" to save Greece, evoking the threat that public salaries and pensions might go unpaid otherwise.

The plan is a condition for 12 billion euros of emergency loans needed by mid-July from stressed eurozone partners and the International Monetary Fund, that could now be unlocked by eurozone finance ministers as early as their next meeting on Sunday.

Clashes had intensified earlier around the parliament, with protesters erecting makeshift barriers on Syntagma Square, as an opposition lawmaker said she would back the government.

Massed ranks of protesters had hurled firecrackers, rocks and metal barriers at security forces over the morning, but Elsa Papadimitriou's decision made the plan more likely to pass.

"Yes indeed," she said of her decision. "To act with patriotism is to support the consensus and cooperation. ... The plan is a solution, necessary ... but budgetary asphyxiation and economic suicide are not," she added.

One Socialist lawmaker repeated during the debate that he might vote against the package, in protest at plans to sell off part of the state's majority holding in the national electricity company, but with a majority of five, Papandreou was secure.

'It's Us or Them'

On the second day of a 48-hour general strike, demonstrators, many wearing masks, said they would go toe-to-toe with nearly 5,000 police in a bid to down the hated package of taxes, spending cuts and sell-offs deemed essential for wider eurozone stability.

"It's us or them," 40-year-old lawyer Rena Nenedaki told AFP during separate early-morning clashes downtown. "The new budget plans and the deal with the EU and the IMF will destroy our country -- it will rip the guts out of workers, the unemployed and our children."

Economics student Alexandros added that if the government "doesn't fall, we will stay in the streets for another month if need be."

The strike brought about blanket power cuts and ground transport in the capital to a halt.

Privatization of Utilities a Priority

European Union and IMF negotiators have made the privatization of a dozen utilities and other public assets including water and electricity a priority, with the goal of raising 50 billion euros by 2015.

New IMF chief Christine Lagarde had urged opposition lawmakers to support the government and vote for the package, saying Tuesday the austerity measures were needed to save Greece's "destiny."

EU president Herman Van Rompuy said approval of the package was "crucial for the Greek people, but also for the eurozone and the stability of the world economy."

The new measures were drawn up to meet EU and IMF conditions for further bailout support, after a 110 billion euro rescue last year.

Creditors could authorize as early as Sunday 12 billion euros in blocked funds needed to stave off bankruptcy for the Athens government when massive repayments fall due in mid-July.

They would then thrash out how much banks and other private creditors will contribute by way of a 'rollover' of existing debts.

Copyright Agence France-Presse, 2011

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