Greek parliament passes austerity deal

Greece’s parliament late last night approved an austerity and debt-relief bill, crucial for the country to avoid bankruptcy and remain in the eurozone.

Politicians voted in favour of the bill that imposes harsh new austerity measures in return for a €130 billion new bailout agreement and related deal with private creditors to shave €100 billion off the country’s national debt.

The vote occurred after extensive rioting and looting swept through the Greek capital.

Rioters in central Athens torched buildings, looted shops and clashed with riot police ahead of the vote.

The clashes erupted after more than 100,000 protesters marched to the parliament to rally against the drastic cuts, which will axe one in five civil service jobs and slash the minimum wage by more than a fifth.

At least 10 buildings were on fire, including a cinema, bank and cafeteria, and looters smashed dozens of shops in the worst riot damage in years.

Dozens of police officers and at least 37 protesters were injured, 23 suspected rioters were arrested and a further 25 detained.

As the vote got under way, Greek prime minister Lucas Papademos urged calm, pointing to the country’s dire financial straits.

“Vandalism and destruction have no place in a democracy and will not be tolerated,” Mr Papademos told parliament.

“I call on the public to show calm. At these crucial times, we do not have the luxury of this type of protest. I think everyone is aware of how serious the situation is.”

The Greek coalition government expelled 43 deputies from its ranks in parliament, over dissent in a crucial debt vote.

The Socialists and conservatives expelled 22 and 21 politicians, respectively, from their parliamentary groups, reducing their majority in the 300-seat parliament from 236 to 193.

A third coalition partner, the rightist LAOS party, effectively withdrew from the government after its leader publicly opposed the deal.

After days of dire warnings and threats of rebellion, parliament began debating the bill setting out €3.3bn in wage, pension and job cuts as the price of a €130bn rescue package from the EU and IMF — Greece’s second since 2010.

Greece needs the funds before Mar 20 to meet debt repayments of €14.5bn. The bill has caused turmoil within the ruling coalition and deepened a social crisis among Greeks already hit by a round of cuts and tax hikes.

During the debate, a Communist Party deputy hurled the pages of the bill on the floor of the chamber and in fiery exchanges with lawmakers, Evangelos Venizelos, the finance minister, warned: “If the law is not passed, the country will go bankrupt.”

He said the vote in the 300-seat parliament had to come by midnight last night “because come Monday morning, banking and financial markets must get the message that Greece can and will survive”.

On Saturday, Papademos had warned that failure to back the bill would mean a disorderly default and “set the country on a disastrous adventure”. Greece was nearing “ground zero”, he said in an address to the nation.

“It would create conditions of uncontrolled economic chaos and social explosion,” Papademos said. “The country would be drawn into a vortex of recession, instability, unemployment and protracted misery and this would sooner or later lead the country out of the euro.”

The EU and IMF say they have had enough of broken promises and that the funds will be released only with the clear commitment of Greek political leaders that they will implement the reforms whoever wins an election potentially in April.

“The promises from Greece aren’t enough for us any more,” German finance minister Wolfgang Schäeuble said during an interview that was published in the Welt am Sonntag newspaper yesterday.