Greece would have run out of money next week without a loan from its international lenders.
By Andy Dabilis for Southeast European Times in Athens -- 08/11/12
Finance Minister Yannis Stournaras (left) shakes hands with Prime Minister Antonis Samaras after parliament approved new austerity measures for Greece. [AFP]
In a dramatic midnight vote on Thursday (November 8th), the Greek parliament narrowly approved a 13.5-billion euro spending cut and tax hike plan to secure release of a long-delayed 31.1-billion euro loan from international lenders.
By a slim majority, 153-128 with 18 voting present and one absent, lawmakers approved the plan put forth by Prime Minister Antonis Samaras that imposes more sweeping austerity measures in an attempt to reduce the nation's massive debt.
Samaras' coalition controlled 177 votes. But opposition to some of the harshest changes led one of the members of his New Democracy Conservatives and six from one of Samaras' partners, the PASOK Socialists, to vote present or against the plan, leading to their ejections from the parties. The other partner, Democratic Left leader Fotis Kouvelis, voted present and his bloc opposed the measures.
The vote came amid a two-day general strike led by the nation's two largest labour unions.
Leonidas Karathanasis, a member of the executive council of GSEE, which represents 500,000 private workers, told SETimes that taking away collective bargaining, reducing severance pay and other changes "will take labour rights back to the medieval ages … workers will be at the mercy of their bosses and it's going to be a jungle in the labour market."
"We will be impoverished totally," Elias Eliopoulos, his counterpart at ADEDY that represents 500,000 public workers, told SETimes. "They [the government] obey the orders of those outside the country … at the expense of the people."
As many as 100,000 protesters marched through the afternoon and into a rainy night, screaming their opposition outside parliament, while hooded anarchists tossed Molotov cocktails at police, who responded with barrages of tear gas, stun grenades and a water cannon.
Police use tear gas to disperse protesters in front of parliament. [AFP]
"We're here because our government is not listening to us," Ariadne Rokari, 37, a secretary, told SETimes. "Their medicine is not good for the people, only for the banks." She said her pay has been cut 30 percent, will now be cut another 30 percent, bringing her to 530 euros a month. She's supporting her sister, who is out of work, and their mother.
Samaras warned that unless the measures were passed that the EU-IMF-ECB Troika would pull the plug on rescue loans, including the first installment of a 130-billion euro rescue package that had been held in limbo, and that Greece would run out of money by November 16th.
"Today we are voting on whether we stay in euro or we return to isolation," he said, adding that salary and pension cuts were unfair but that they would be the last and the government would now pursue tax evaders and try to curb waste.
Alexis Tsipras, leader of the major opposition Coalition of the Radical Left (SYRIZA), demanded new elections because he said the coalition had reneged on promises to resist austerity and ridiculed the government's hopes to secure an extension to make more reforms.
"The only extension we need is for the rope with which we will hang ourselves," he said.
Antonis Klapsis, head of research for the Konstandinos Karamanlis Institute for Democracy, the New Democracy think-tank, said the government had no other choice and lauded the reforms.
"Greece has reached the turning point," he told SETimes. "This is the end of a difficult road and there are good chances the economy will start developing again."
Nicholas Economides, professor of economics at New York University, told SETimes that additional austerity without investment will not work. "The government must bite the bullet and fire those public servants that are no more useful or productive," he said.
The Troika wants Greece to reduce its debt-to-GDP, now at almost 190 percent, to 120 percent by 2020, but tax revenues are off target and unpaid taxes for this year have reached 10.17 billion euros, the finance ministry said.
Dimitris Sotiropoulos, a political science professor and research associate at the Hellenic Foundation for European and Foreign Policy in Athens, told SETimes that the package "will help Greece turn the corner only if it proceeds with public sector reforms and the opening up of liberal professions and other occupations," such as lawyers, pharmacists, and taxi drivers.