Greece to vote on austerity package after deadly riots

Posted by on May 6th, 2010 and filed under Business/Economy, International, Politics. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

Athens, May 6 (DPA) Greece’s only chance to avoid bankruptcy is to accept money from a joint European Union-International Monetary Fund rescue programme, the government said Thursday ahead of a parliamentary vote on new austerity measures.

‘The situation today is simple – either we vote and implement the deal or we condemn the country to bankruptcy,’ Prime Minister George Papandreou told parliament, one day after riots against budget cuts and tax hikes left three people dead.

The Socialist government is left with no other choice but to impose severe austerity measures, which include slashing salaries and pensions as well as increasing taxes, in exchange for a 110 billion euro ($160 billion) loan.

Papandreou has defended the measures, which foresee 30 billion euros in savings, mainly from cuts to pensions and wages, saying the government will do everything possible to prevent Greece defaulting.

‘The government has the responsibility of implementing the most difficult financial measures ever taken in this country,’ said Finance Minister George Papaconstantinou.

The bill is expected to pass easily as the Socialist government holds a comfortable majority in the 300-seat legislature.

Greece urgently requires the EU/IMF bail-out as it faces a May 19 deadline on a debt it says it cannot repay without new funds.

The European Union had hoped that by activating the three-year Greek rescue programme it would calm markets and give the government leeway to overhaul its heavily indebted economy.

Renewed investor concerns that the Greek crisis could spread to other eurozone countries sent Europe’s common currency to its lowest level in more than a year.

European Monetary Affairs Commissioner Olli Rehn said it was absolutely essential to contain the fire in Greece so that it will not pose a threat to the financial stability for the European Union and its economy as a whole.

Wednesday more than 100,000 people took to the streets to protest the new taxes and government spending cuts demanded by the IMF and other European countries before debt-ridden Greece gets a 110-billion-euro bail-out package of loans to keep it from defaulting.

The riots, the worst to hit the country since the police shooting of a teenager in 2008, flared out of control in Athens Wednesday.

Masked rioters, armed with slabs of marble, bottles and Molotov cocktails clashed with police, torched buildings and cars, destroyed shops and tried to storm parliament.

The remains of three people, including a pregnant woman, were discovered inside a bank in central Athens after rioters broke a window and threw Molotov cocktails inside.

Crowds of people could be seen leaving flowers and candles outside the burned windows of the bank where the three died throughout the day.

The deaths were the first during a protest in Greece in decades.

At least 45 people, including 29 police officers, suffered injuries in what Civil Protection Minister Michalis Chrisohoides called a ‘black day for democracy’.

Police officials said 25 people were arrested and another 70 detained during the riots in Athens, the port cities of Thessaloniki and Patras, the city of Ioannina and Iraklio on the southern Mediterranean island of Crete.

The protests came amid a 24-hour nationwide strike that grounded flights to and from Greece, paralysed sea and rail transport, shut down schools and government services and left hospitals operating with emergency staff.

With unions vowing more protests in the next few weeks, the large-scale social unrest and violence is seen as a blow to the ruling Socialist government.

The government has vowed not to retreat a single step on the measures despite violence across Greece.

While many Greeks believe some of the cutbacks are necessary to put their economy back on track, public anger is expected to escalate as many people begin feeling the effect of the austerity measures.

In recent polls, one in two Greeks said they are prepared to take to the streets to fight the austerity plans, which they say are due to corruption and political mismanagement of the economy.

Greece’s main public sector union ADEDY and private sector union GSEE said they will continue to fight against the measures and hold a rally outside parliament during Thursday’s vote.

The communist union PANE said it planned a rally in Athens later Thursday, while the bank workers’ Union said it would hold a one-day strike in memory of the killed bank employees.

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