The Greek parliament approved a deeply unpopular austerity bill to secure a second $130bn (£110bn) bailout and avoid a messy default after a day of street battles between police and protesters left Athens in flames.
The 199-74 vote was passed amid some of the most serious violence seen on the streets Athens and spread to other Greek towns and cities, including the holiday islands of Corfu and Crete.
More than 45,000 protesters, many facing steep cuts in pensions, wages and a bigger fall in living standards besieged the Greek Parliament in two demonstrations. A minority were met with tear gas by the 4,000 policemen after throwing fire bombs.
The controversial loan and austerity package sets out €3.3bn in wage, pension and job cuts for this year alone, adding to the pain of years of recession, high employment, lower wages and high unemployment.
What will the bailout vote achieve for Greece?
Around 45 people were injured and several historic buildings in central Athens, including cafes and cinemas, were set on fire by petrol bombs hurled by masked protesters. The streets were strewn with glass and stones.
Lucas Papademos, the embattled Prime Minister, told Parliament: "Vandalism and destruction have no place in a democracy and will not be tolerated. I call on the public to show calm. At these crucial times, we do not have the luxury of this type of protest. I think everyone is aware of how serious the situation is."
Parliament also approved a related deal to write off €100bn of Greek debt held by private banks. Another key hurdle needed for EU-IMF (Berlin: MXG1.BE - news) bailout funds to be released.
The eurozone finance ministers must now approve the deal before the country can receive the fund needed to repay a €14.5bn bond on March 20.
A protester gestures at riot police during clashes in the northern Greek port city of Thessaloniki, late on Sunday. Photo: AP
Sunday's vote also clears the way for elections in April. This is another potential trigger point in the ongoing debt crisis as it could see the current coalition ousted by parties less willing to accept the harsh austerity bailout conditions agreed.
Inside parliament emotions ran high over the price the country was being forced to pay for its second bail out, a €130bn (£110bn) loan from the EU and the International Monetary Fund to head off the threat of bankruptcy and withdrawal from the euro.
Finance minister Evangelos Venizelos, in a passionate appeal for support before the vote, said: "We must show that Greeks, when they are called on to choose between the bad and the worst, choose the bad to avoid the worst."
Finance minister Evangelos Venizelos urged parliament to 'choose the bad to avoid the worst'.
After the vote, Greece's coalition government expelled 43 deputies from its ranks in parliament because they dissented. The Socialists and conservatives expelled 22 and 21 lawmakers, respectively, from their parliamentary groups to voting agianst he bill. This reduces their majority in the 300-seat parliament from 236 to 193.
The Greek cabinet unanimously approved the package on Friday after six members resigned. Laos, the small nationalist party headed by Giorgios Karatzaferis withdrew support but with the two main parties continuing to back the draconian measures, Mr Papademos was expected to win parliamentary approval.
The sacrifices involved in meeting the terms of the latest austerity package have infuriated unions and workers while German demands for even tougher measures as a condition of continued Greek membership of the eurozone have caused widespread public anger.
Pension cuts totalling €300bn, a 22pc reduction in the minimum wage and the loss of 150,000 public sector jobs by 2015 will hit almost every Greek household.
Greece's Prime Minister Lucas Papademos receives congratulations after Greek lawmakers approved a new austerity deal. Photo: Reuters
Mr Papademos, in a television address to the nation late on Saturday, spelled out the cost of rejecting the package. He said it would "set the country on a disastrous adventure" and "create conditions of uncontrolled economic chaos and social explosion."
He added: "The country would be drawn into a vortex of recession, instability, unemployment and protracted misery and this would sooner or later lead the country out of the euro."
The German intervention did nothing to help Mr Papademos with finance minister Wolfgang Schaeuble, declaring in an interview with the Welt am Sonntag newspaper: "The promises from Greece aren't enough for us any more."
He added: "Greece needs to do its own homework to become competitive whether that happens in conjunction with a new rescue programme or by another route that we actually don't want to take.".
Contingency plans for a return to the Drachma have been drawn up in Athens, Berlin and Brussels.
3 comments