Thursday, May 6, 2010

The Greek parliament has approved an austerity bill proposed by the government to help rescue the country’s ailing economy.

The proposal, which includes increases in taxes, as well as salary and pension cuts, passed with 172 members of parliament supporting, 121 opposing, and several abstaining; the proposal needed at least 151 votes to pass. There are 300 total parliament seats.

The vote comes after a debate that took the entire day. Meanwhile, rallies and strikes are being held around the country to protest against the measures; the protests have occasionally turned violent, with a firebomb attack on a bank killing three people yesterday.

The Eurozone and the International Monetary Fund had asked for austerity plans to be implemented so that Greece can access a rescue loan package worth US$146 billion in order not to default on debts. The austerity programme is estimated to save $38 billion. Greece also aims to lower the public deficit to less than 3% of the GDP in four years; at the moment it is at 13.6%.

Prime minister George Papandreou described the situation to parliament ahead of the vote, saying: “The situation today is simple – either we vote and implement the deal or we condemn the country to bankruptcy […] The future of Greece is at stake. The economy, democracy and social cohesion are being put to the test.”

Papandreou also expelled three Social deputies from his parliamentary team when they abstained from voting; however, his bloc still has a parliament majority of 157 MPs.

Finance minister George Papaconstantinou also commented that Greece will default on some of its $12 billion debt on May 19 if action is not taken, saying: “The state’s coffers don’t have that money. 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.”

Opposition parties, however, say the measures will put too heavy a burden on the populace; the leader of the conservatives, Antonis Samaras, commented: “The dose of the medicine you are administering is in danger of killing the patient. You know that these measures have sparked a social explosion […] The citizens of this country have to believe there is a way out. Because whoever cuts pensions of €700 cannot convince anyone.”