Europe

Greece crisis: MPs vote on austerity package

  • 29 June 2011
  • From the section Europe

The Greek parliament is voting on drastic austerity measures that have sparked nationwide strikes and rioting in the capital, Athens.

The 28bn-euro (£25bn; $40bn) package is expected to be approved by parliament by a narrow margin - without it Greece could run out of money within weeks.

PM George Papandreou urged MPs to approve the package by consensus.

There are violent clashes outside parliament, where protesters earlier tried to prevent MPs from entering.

A 48-hour general strike is under way in protest at the proposed changes.

As debating closed, Mr Papandreou deputies must "avoid the country's collapse at all costs".

"Now is not the time to step back."

He has said his austerity plan is the only way to get Greece back on its feet.

One opposition MP, Elsa Papadimitriou, has said she intends to vote with the government, increasing its chances of victory.

Anti-cuts protesters in Syntagma Square have set up roadblocks and attempted to ring the parliament building to prevent deputies from entering.

One parliamentary deputy, communist MP Lianna Kanelli, was surrounded and had yoghurt thrown at her as she arrived - she was allowed to go when she promised to vote no.

Police have fired tear gas at the crowds, who responded with stones and rubbish - at least one person required medical treatment.

Wednesday's vote will cover the first part of Greece's austerity package, focusing on raising taxes to secure some 14.09bn euros over the next five years and introducing 14.32bn euros in public spending cuts.

It will be followed on Thursday by a vote on a change in law allowing the package to be put in place.

The package is needed to secure the next instalment of the country's 110bn-euro bail-out to be released by the EU and IMF.

Once passed, European officials will start to finalise the details of a second bail-out, worth an estimated 120bn euros, designed to help Greece pay its debts until the end of 2014.

The impact of the Greek vote would be felt worldwide said Herman Van Rompuy, president of the EU Commission, on Tuesday.

The governor of Greece's central bank, George Provopoulos, said a 'no' vote would be "suicide" for the country.

Petrol bombs

A Greek government defeat would send ripples of anxiety right across the eurozone, with Greece facing the prospect next month of becoming the first member state to default on its debts, says the BBC's Chris Morris in Athens.

Late on Tuesday, the newly named IMF chief, Christine Lagarde, urged Greek politicians to unite to avoid a debt default, saying: "The country's destiny is at stake.

"If I have a message this evening about Greece, it is a call to the Greek opposition... to join in national unity with the party which is currently in power."

But the measures have been fiercely opposed by the public. Polls suggest up to 80% of Greeks oppose them.

On Tuesday, thousands of protesters marched through Athens' traffic-free centre as public transport ground to a halt during the general strike.

More than 5,000 police officers were deployed to control the protests.

The march became violent in places with protesters throwing petrol bombs and stones - police fired tear gas to disperse crowds.

Officials say 46 people were injured, including 37 policemen, and 14 people were arrested.

One man was reportedly stabbed as fighting broke out between rival groups of protesters; some trade unionists tried to persuade anarchists to leave the square, saying their violent protests were only harming the demonstrators' cause.

The strike has halted most public services, closed banks. Hospitals are operating on skeleton staff while many flights, trains, buses and ferries are cancelled. Protesters blockaded the port of Piraeus, near Athens, which links most Greek islands with the mainland.

The unions are angry that the government's austerity programme will impose taxes on those earning the minimum wage, following months of other cuts, which have seen unemployment rise to more than 16%.

Recently-appointed Finance Minister Evangelos Venizelos acknowledged that the cuts were "unfair", but said they were absolutely necessary, and called on all deputies to back them.

But the main opposition leader, Antonis Samaras of the New Democracy party, said the thinking behind the austerity package was flawed, and that tax rates should be lowered rather than raised in order to stimulate the economy.

Mr Papandreou faces wavering support from within the governing Panhellenic Socialist Movement (Pasok). But it is now thought just one Pasok deputy intends to oppose the bill.

The party has a slim majority, with 155 seats out of 300 in parliament.

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