Austerity plan

Greece MPs pass austerity plan amid violent protests

Greek MPs have approved a controversial package of austerity measures, demanded by the eurozone and IMF in return for a 130bn euro ($170bn; £110bn) bailout.

The vote was carried by 199 in favour to 74 against.

Coalition parties expelled more than 40 deputies for failing to back the bill.

Tens of thousands protested in Athens, where there were widespread clashes and buildings were set on fire. Violent protests were reported in cities across the country.

Protesters outside parliament threw stones and petrol bombs, and police responded with tear gas. Scores of police and protesters were injured.

Prime Minister Lucas Papademos urged calm, insisting that the austerity package would "set the foundations for the reform and recovery of the economy".

"Vandalism, violence and destruction have no place in a democratic country and won't be tolerated," he said in a speech in parliament before the vote.

The bill passed parliament easily as the two largest parties in the coalition - Pasok and New Democracy - account for more than two-thirds of the deputies.

The austerity measures include:

  • 15,000 public-sector job cuts
  • liberalisation of labour laws
  • lowering the minimum wage by 20% from 751 euros a month to 600 euros

Eurozone ministers must now ratify the measures at a meeting in Brussels on Wednesday before bailout funds can be released.

The ministers rejected proposals put forward by the Greeks last week, which they said fell 325m euros short of the cuts needed.

The BBC's Mark Lowen in Athens says the public are increasingly angry with the austerity measures and feel that the impact is beyond the value of the bailout.

At least 80,000 people were reported to have joined demonstrations in Athens, with another 20,000 protesting in Thessaloniki.

Running battles with police continued in the capital until late on Sunday, although no new clashes were reported after the vote.

Protesters hurled flares and chunks of marble torn up from the square. Some had tried to break through a cordon of riot police around the parliament.

Several historic buildings, including cafes and cinemas, were set alight.

Ioannis Simantiras, 34, said the protesters were boxed in by police.

"Nobody could get away from the gas," he told the BBC.

"When it engulfed everybody, and everybody was choking the police drew back and opened up a corridor for us away from the parliament - that's when everybody made a run for it."

Violent protests also spread to other Greek towns and cities, including the islands of Corfu and Crete, according to state TV.

Finance Minister Evangelos Venizelos said the question was not "whether some salaries and pensions will be curtailed, but whether we will be able to pay even these reduced wages and pensions".

"When you have to choose between bad and worse, you will pick what is bad to avoid what is worse," he said.

Greece needs the bailout the make its next repayment on its huge sovereign debt.

If it cannot make the payment, it will default and in effect become bankrupt.

Analysts say such a "chaotic default" could endanger Europe's financial stability and possibly even leading to a break-up of the eurozone.

As part of the deal with international lenders, Greece will also be able to write off 100bn euros of privately held debt.

Earlier this week several ministers from the coalition government, including two from Pasok, quit in protest at the measures.

The leader of the far-right Laos party, the junior coalition member, announced his 15 deputies would not back the austerity measures.

George Karatzaferis complained that the measures amounted to Greeks being "humiliated" by Germany.

The eurozone bloc has demanded "strong political assurances" that the packages will be implemented regardless of which party wins a general election due in April.

(Published by BBC - February 13, 2012)

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