Aus­ter­ity for Greece as ri­ot­ing con­tin­ues

Shanghai Daily - - TOP NEWS -

GREECE’S law­mak­ers yes­ter­day ap­proved the deeply un­pop­u­lar aus­ter­ity bill needed to avert de­fault next month, de­spite a sec­ond day of ri­ot­ing on the streets of Athens that left dozens of po­lice and pro­test­ers in­jured.

The pas­sage of the bill was a de­ci­sive step for the coun­try to get the next batch of bailout loans from in­ter­na­tional cred­i­tors and was met with re­lief in mar­kets and by Greece’s part­ners in the eu­ro­zone. A Greek de­fault could po­ten­tially trig­ger a bank­ing cri­sis, par­tic­u­larly in Europe, and tur­moil in global mar­kets.

An­other bill has to be passed to­day for the govern­ment to se­cure the money.

The bill to cut spend­ing and raise taxes by 28 bil­lion eu­ros ( US$ 40 bil­lion) over five years, and raise 50 bil­lion eu­ros in pri­va­ti­za­tions over the same pe­riod, has pro­voked wide­spread out­rage, com­ing af­ter a year of deep cuts that have seen pub­lic sec­tor salaries and pen­sions slashed and un­em­ploy­ment ris­ing to above 16 per­cent.

While deputies voted, stun grenades echoed across the square out­side the Par­lia­ment build­ing and acrid clouds of tear gas hung in the streets. The vi­o­lence con­tin­ued spo­rad­i­cally af­ter the vote and smoke was bil­low­ing from be­neath the Fi­nance Min­istry.

Au­thor­i­ties and emer­gency ser­vices said 26 po­lice and 15 pro­test­ers were in­jured and taken to hos­pi­tal, while 29 peo­ple were de­tained and nine ar­rested.

The Euro­pean Union and the In­ter­na­tional Mon­e­tary Fund have de­manded both bills pass be­fore it re­leases 12 bil­lion eu­ros of the coun­try’s 110 bil­lion eu­ros bailout fund. With­out it, Greece was fac­ing de­fault­ing on its debts by the mid­dle of next month.

Even with the in­stall­ment, Greece is still in fi­nan­cial trou­ble and has been in talks with its in­ter­na­tional cred­i­tors for a sec­ond bailout, which Prime Min­is­ter Ge­orge Pa­pan­dreou has said will be roughly the same size as the first.

“We must avoid the coun­try’s col­lapse with every ef­fort,” Pa­pan­dreou said be­fore the vote. “Out­side, many are protest­ing. Some are truly suf­fer­ing, others are los­ing their priv­i­leges. It is their demo­cratic right. But they and no one else must never suf­fer the con­se­quences and for their fam­i­lies of a col­lapse. We must do ev­ery­thing so that there is no freeze in pay­ments.”

The Greek vote was greeted pos­i­tively in Europe’s cap­i­tals, which have been fret­ting about the im­pact of a po­ten­tial Greek de­fault on their bank­ing sys­tems and on the fu­ture of the euro cur­rency it­self.

“That’s re­ally good news,” Ger­man Chan­cel­lor An­gela Merkel said when told of the vote on her way out of an eco­nomic fo­rum in Ber­lin. Ger­many is Greece’s big­gest cred­i­tor.

EU lead­ers hailed the vote as an act of “na­tional re­spon­si­bil­ity” and urged Greek law­mak­ers to fol­low up with an­other pos­i­tive vote to­day.

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