/ 29 June 2011

Greek Parliament approves austerity package

Greek Parliament Approves Austerity Package

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

Lawmakers voted 155 to 138 for the hotly-disputed package to slash €28.4-billion from the balance of government spending by 2015, in the first of a two-part vote to continue on Thursday aimed at unlocking emergency finance from the European Union and the International Monetary Fund (IMF).

Five lawmakers voted only ‘present’ — a political statement in Greece considered subtly different from abstention — while two of the 300 members elected to the Parliament declined to cast their ballots.

Blind MP Panayotis Kouroublis was the only government rebel, and not the one anticipated.

He said he “couldn’t accept blackmail” by the eurozone and the IMF — which earned him an immediate expulsion from the ruling Socialist party.

His defiance was compensated for by a single conservative opposition rebel, Elsa Papadimitriou, who also saw the whip on her side.

Greek Prime Minister George Papandreou’s majority could be slimmer going into the second vote on Thursday on the details of the austerity plan’s implementation, some of which has been particularly divisive — such as the sale of part of the state’s majority holding in the national electricity company.

A “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 repayment of its 350-billion-euro debt mountain.

The EU welcomed the Greek parliament’s vote as a step towards reform and a step back from the threat of default.

“I welcome the vote in the Greek Parliament today. A vote of national responsibility,” said EU president Herman Van Rompuy after the vote.

A joint statement from Van Rompuy and European Commission president José Manuel Barroso said Greece “has taken an important step forward along the necessary path of fiscal consolidation and growth-enhancing structural reform”.

“But it has also taken a vital step back — from the very grave scenario of default.”

The statement added that Europe would again be watching Athens on Thursday when parliamentarians vote on implementing measures.

“A second positive vote will pave the way for the disbursement of the next tranche of financial assistance,” it said, referring to the €12-billion instalment of a €110-billion bailout of Greece in May 2010.

“It would also allow for work to proceed rapidly on a second package of financial assistance, enabling the country to move forward and restoring hope to the Greek people,” the two EU leaders said.

A second bailout of Greece is tipped to be almost as big as the first. — AFP