Greek austerity gains momentum despite growing protests | Europe| News and current affairs from around the continent | DW | 29.06.2011
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Europe

Greek austerity gains momentum despite growing protests

Greece's latest round of austerity measures continues to divide its people and lawmakers, with workers continuing a two-day strike as parliament votes on the bill. Approval is necessary to save Greece from default.

George Papandreou

Papandreou hopes to keep his party in line

Greek lawmakers appeared increasingly likely to pass a new round of austerity measures on Wednesday, with the fate of the country's emergency loan package and perhaps its place in the eurozone at stake.

The bill's passage is contingent on the government's ability to keep in line its slim majority of 155 out of 300 seats. A small number of lawmakers from the ruling Socialist party have defected or threatened to vote against some of or all of the measures.

However Thomas Robopoulos, one of three Socialist deputies who said he would vote against the bill, backtracked before the vote and told Reuters news agency he would support the bill.

"I have made the decision to vote for the plan because national interests are more important than our own dignity," he said.

Protesters shout through bullhorn

Many have protested against budget cuts, tax hikes and privatizations

In addition, an opposition conservative lawmaker said during parliamentary debate that she would vote in favor.

"To act with patriotism is to support consensus and cooperation," said Elsa Papadimitriou. "The plan is a solution, necessary… but budgetary asphyxiation and economic suicide are not."

Escalating protests

The vote comes amid a 48-hour general strike and public protests, as workers unhappy with the spending cuts and tax hikes voiced their frustration with the government.

Tens of thousands of protesters beat drums, chanted and waved banners outside parliament in Athens, calling on lawmakers to vote against the austerity measures. Police fired tear gas at a group of protesters who broke through a police barrier outside parliament.

On Tuesday, dozens of people were arrested as mostly young people clashed with police into the night, leaving central Athens filled with tear gas, burned debris, shattered glass and smashed marble paving stones.

Prime Minister George Papandreou had hoped to reach a consensus with opposition politicians, who have been unwavering in their condemnation of his austerity policies.

"The Greek economy today is already heavily burdened with taxes," said Antonis Samaras, head of the conservative opposition New Democracy party. "The people won't bear higher taxes. New taxes crush tax revenue."

Man sits in hammock at port

Workers staged a 48-hour general strike to protest the government's austerity plan

No vote would be 'suicide'

Greece needs to pass the measures, which total 28 billion euros ($40 billion) in cuts and tax hikes by 2015 and 50 billion euros in privatizations, in order to secure the next 12-billion-euro installment of a lifeline from the European Union and International Monetary Fund.

Without the emergency funds, Greece would run out of cash within weeks, putting its government bonds into default. Such a move would likely cause panic in international markets and throw the euro currency's position as a stable investment into turmoil.

The Financial Times on Wednesday quoted Greece's central bank governor, George Provopoulos, as saying a defeat of the measures would be "suicide."

Jose Manuel Barroso

Barroso and the EU have insisted on budget cuts as a condition for aid

"For parliament to vote against this package would be a crime," he said. "The country would be voting for its suicide."

'No plan B'

Markets have showed confidence in the Greek parliament's ability to get the bill passed, with shares in London and Frankfurt mirroring gains in Asia ahead of the vote. The euro also made slight gains against the dollar.

While Wednesday's vote covers much of the austerity plan, lawmakers on Thursday are to vote on more detailed bills related to the implementation. Passage of those measures was less certain.

Greece has already passed several rounds of austerity measures since the beginning of its economic crisis in 2009. But persistent high unemployment, negative economic growth and low tax revenues have made another bailout necessary. The government could need some 120 billion euros in additional emergency loans to stay solvent.

The greatest pressure to reform its economy and decrease its deficit is coming from the EU and IMF. In Brussels, European Commission President Jose Manuel Barroso said Greece had no other choice but to approve the austerity measures or face its economic crisis without EU money.

"There is no plan B to save Greece from default," he said.

Author: Andrew Bowen (AFP, Reuters, dpa)
Editor: Martin Kuebler

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