Greek MPs vote for cuts worth €13.5bn as riots rage in Athens

Austerity package was crucial to obtaining further bailout funds

Athens

Greek MPs approved the country's latest austerity package yesterday aimed at securing – the ruling coalition insists – its financial survival and membership within the European family. Meanwhile, ordinary people's anger reached boiling point in widespread demonstrations and an 80,000-strong protest outside parliament.

The harsh measures passed with a razor thin majority, as only 153 MPs out of the 300-seat parliament voted in favour. Shortly after the vote was concluded, two of the ruling parties expelled seven MPs for voting against the bill. Lawmakers will also have to vote for the country's budget on Sunday.

After the conclusion of the vote, Greece's Prime Minister, Antonis Samaras, called the approval of the measures "a decisive and optimistic step... towards recovery".

Athens is pinning its hopes on the measures in an effort to secure more aid from Europe as well as an extension to its bailout.

The cutbacks – worth €13.5bn over the next two years – are essential if Greece is to continue receiving bailout funds from international creditors. The bill includes cuts to wages and pensions as well as labour reforms, in exchange for a €31bn aid lot that is already five months overdue.

But speaking hours before the vote, the Interior Minister, Evripidis Stylianidis, said the passing of this bill would allow Greece to ask for an extra "emergency growth package" to spur investment and create jobs. He added that Athens would argue for the release of a further €10bn, taking the total amount to more than €40bn.

By supporting this "we are voting against our people", admitted Mr Stylianidis. After the voting of the measures, "the ultimate responsibility will be handed to Europe – if its leaders don't implement the principle of European solidarity without audacity and delay, they won't only derail Greece but threaten the security of Europe," he said, pointing to Greece's daily struggle to safeguard European borders against illegal migrants.

Finance ministers from eurozone countries are to meet on 12 November to decide on aid payments to Greece. "Our position in parliament will be judged, and the Greek people have already been judged and they have passed the test of patience. Monday's Eurogroup will test the leadership and prospect of Europe," Mr Stylianidis said.

To many Greeks the cuts are unacceptable. For the second day, thousands of protesters descended on Syntagma Square on Tuesday, next to the legislative house. While debate over the austerity bill raged in parliament, in the streets of Athens violence spiralled out of control. Riot police used a water cannon and tear gas to disperse protesters hurling petrol bomb.

Shopowner Apostolos Vaitsis, 43, joined demonstrators. "They're voting to close down my business," he said, explaining he'd have to pay an additional €4,500 in taxes this year. "How will Europe ever get its money back when we're broke and can't pay our taxes?"

His brother, Panayotis, a salesman unemployed for more than a year, also questioned the intentions of Europe. "The measures just prove [European leaders] don't want their money back. They're asking us to vote against growth and for the sale of Greece's few profitable state businesses."

Public service wages that have already suffered reductions of nearly 40 per cent will be further axed while labour reforms will make it easier for employers to fire staff. To oppose the cuts, judges and doctors participated in a 48-hour general strike while dozens of uniformed policemen also protested outside parliament yesterday.

"It's a massacre, how will we live?" asked Christos Fotopoulos, president of the Police Union. Father-of-three Mr Fotopoulos will see his monthly salary of €1,550 drop to €1,220 and warns that the wage cuts will only foment corruption. Experts say the real test for the government will start when the measures are implemented.

As part of the general strike, which was due to end yesterday, air travel was disrupted, ferries were docked and hospitals were only treating emergency cases.

The government plans to use the €40bn loan to strengthen its banks, encouraging them to approve loans in the hope of getting the economy going again. The number of people in Greece without a job has reached a high of 25 per cent, while youth unemployment has doubled in three years.

The cash would help the country avert a bankruptcy that would force it out of the eurozone. The Prime Minister had warned that the country's coffers would run dry by 16 November.

George Tzogopoulos, a political analyst from think tank ELIAMEP, warned: "Unless Europe practically supports growth in Greece and gives a stimulus package for the economy, the measures will not only affect society but will be a threat to the unity of the coalition government."

Weary Greeks have already suffered a 35 per cent drop in their quality of life in the past two years, according to authorities. Many already lack access to basics like drinking water, heating and lighting, according to the Greek National Centre for Social Research.

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