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Greek parliament approves austerity measures, preventing first Euro zone default

Wednesday, June 29th 2011 - 16:42 UTC
Full article 5 comments
Rioting in the streets of Athens as Parliament voted draconian measures (Photo AFP) Rioting in the streets of Athens as Parliament voted draconian measures (Photo AFP)

Greece's parliament approved early Wednesday deeply unpopular austerity measures despite worsening violence, in a vote vital toward securing international funds and preventing the Euro zone's first sovereign default.

Lawmakers approved a five-year package of spending cuts, tax rises and state asset sales by a comfortable margin of 155 votes to 138 in a roll-call vote, handing a significant victory to embattled Prime Minister George Papandreou.

“We must avoid the country's collapse at all costs. Now is not the time to step back,” the Socialist premier told lawmakers in a final appeal just before the crucial vote.

The bigger than expected margin suggested the government should be able on Thursday to push through laws implementing detailed budget measures and privatizations.

With the country on the brink of bankruptcy and social unrest mounting, it remains unclear whether the government can stick to a tight EU/IMF-imposed schedule to implement the harsh measures, even if it wins all this week's parliamentary votes.

The EU and the IMF have said Greece must adopt the austerity plan, with 28.6 billion Euros in savings, and the implementation measures to receive the next 12 billion Euro slice of emergency loans by mid-July.

The full pain of pay and benefit cuts and swinging tax increases has yet to be felt, and public anger is boiling. Only one PASOK party deputy voted against the plan, and he was immediately expelled from the party by Papandreou.

At least one opposition deputy broke ranks with the main conservative New Democracy party to vote “yes” on the austerity package and one of three PASOK rebels changed heart.

PASOK now holds 154 seats in the 300-member chamber and was helped by the abstention of a small centre-right splinter group of five deputies led by former foreign minister Dora Bakoyanis.

Chancellor Angela Merkel of Germany, Europe's reluctant paymaster and the main contributor to the Greek bailout, was first to praise the “brave” Greek vote on the fiscal package.

The decision was “brave as well as necessary,” Merkel told a meeting on financial regulation in Berlin, adding: ”I find it especially regrettable that the Greek opposition is not supporting the reform package.
 

Categories: Economy, Politics, International.

Top Comments

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  • briton

    poor greece
    but alas, corruption has its limits,
    and the poor pay the price,
    [according to TV, the rich pay no taxes ?????

    Jun 29th, 2011 - 07:11 pm 0
  • MarkWhelan

    In that case Brasil will be in BIG trouble.

    Jun 29th, 2011 - 09:50 pm 0
  • ElaineB

    @1 The rich not paying taxes was one of the key elements that led to the collapse of the Argentine economy. Obviously not the only key issue but a contributing factor.

    As I say many times, tackling tax avoidance by the rich in all countries should be a priority of the tax authorities. I remember Mark Steel once wrote that 'chasing benefit cheats rather than the rich tax dodgers was like letting the Great Train Robbers go whilst arresting a single fair dodger in the second carriage of the train. ' He said it more eloquently, but you get the drift.

    Jun 29th, 2011 - 11:20 pm 0
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