Greece approves austerity to stay in eurozone
Greek Finance Minister Evangelos Venizelos said that measures were vital to the country's very economic survival.
Greece's parliament has approved an austerity and debt-relief bill, crucial for the country to avoid bankruptcy and remain in the eurozone. Lawmakers voted early Monday in favor of the bill that imposes harsh new austerity measures in return for a euro 130 billion ($171 billion) new bailout agreement and related deal with private creditors to shave euro100 billion ($132 billion) off the country's national debt.
The vote occurred after extensive rioting and looting swept through the Greek capital.
Demonstrators set buildings ablaze and fireballs lit up the night sky in Greece's capital on Sunday amid widespread rioting before a historic parliamentary vote on harsh austerity measures designed to prevent the country from going bankrupt.
The clashes erupted after more than 100,000 protesters marched to the parliament to rally against the drastic cuts, which will ax one in five civil service jobs and slash the minimum wage by more than a fifth.
At least 10 buildings were on fire, including a movie theater, bank and cafeteria, and looters smashed dozens of shops in the worst riot damage in years. Dozens of police officers and at least 37 protesters were injured, and more than 20 suspected rioters were detained.
As the vote got under way early Monday, Prime Minister Lucas Papademos urged calm, pointing to the country's dire financial straits.
Since May 2010, Greece has survived on a $145 billion (euro110 billion) bailout from its European partners and the International Monetary Fund. When that proved insufficient, a new rescue package worth a further $171 billion (euro130 billion) was approved — 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 to implement spending cuts and public sector reforms that will end years of fiscal profligacy and tame gaping budget deficits.
As protests raged Sunday, demonstrators set bonfires in front of parliament and dozens of riot police formed lines to keep them from making a run on the building. Security forces fired dozens of tear gas volleys at rioters, who attacked them with firebombs and chunks of marble broken off the fronts of luxury hotels, banks and department stores.
Clouds of tear gas drifted across the square, and many in the crowd wore gas masks or had their faces covered, while others carried Greek flags and banners.
Papademos' government — an unlikely coalition of the majority Socialists and their main foes, New Democracy — was expected to carry the austerity 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 private sector wage cuts, pension reductions and civil service layoffs dictated by the draft austerity program.
Finance Minister Evangelos Venizelos said the measures were vital to the country's very economic survival.
"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 said. "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 doesn't happen, the country will go bankrupt."
Asked whether Greece has a long-term future in the eurozone, Germany's Vice Chancellor Philip Roesler said "that is now in the hands of the Greeks alone."
"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 told ARD television
"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.
