Greek Parliament Passes Austerity Bill
The Greek Parliament has passed a crucial austerity Bill to raise taxes, cut pensions and attempt to stop national debt spiralling as thousands of protestors massed outside the building.
The vote in favour of the stringent measures was needed to secure £93 billion in loans from the International Monetary Fund and other European states and came the day after similar protests turned violent, resulting in the deaths of three people.
A simple majority of 151 voted in favour, enabling the Bill to pass through the 300-member Parliament. The governing Socialist party has 160 seats, but three of its deputies abstained.
Greek workers say that the conditions of the three-year rescue package, which will result in £30 billion of cuts to public spending, are too severe and are designed to make the most vulnerable pay for the errors of the rich.
Salaries will be slashed by 25 per cent for civil servants, pensions will also be reduced and the age of retirement increased.
Demonstrations against the cuts turned violent yesterday and three people, including a pregnant woman, were killed when a petrol bomb was thrown into a bank.
The bank workers, two women and one man, died in the blaze. Their deaths were the first in protests in Greece for 20 years.
As the vote was returned protesters remained peaceful this afternoon.
In a heated debate before the vote, the Prime Minister and Finance Minister said the rescue package was the only hope for the country to avoid bankruptcy.
"Today things are simple. Either we vote and implement the deal, or we condemn Greece to bankruptcy," George Papandreou, the Prime Minister, said.
The rescue loans are aimed at containing the debt crisis and keeping Greece's troubles from spreading to other countries with vulnerable state finances such as Portugal and Spain.
Fears of Greek default have undermined the euro, and while the current package should keep Greece from immediate bankruptcy its long-term prospects are unclear. Its growth prospects are weak and the population's willingness to accept cutbacks may wane, leading some economists to predict debt restructuring.
George Papaconstantinou, the Finance Minister, said that the Government had no choice but to impose the austerity measures, which were being rushed through Parliament as urgent legislation because the country was two weeks away from default, with $8.5 billion worth of bonds maturing on May 19.
"The state's coffers don't have that money," Mr Papaconstantinou said. "Because today ... the country can't borrow it from the international market. And because the only way for the country to avoid bankruptcy and suspension of payments is to take the money from our European partners and the International Monetary Fund."