February 13, 2012
The Greek parliament has passed an austerity package that clears the way for a 130-billion-euro EU/IMF rescue package intended to save Greece from default. Violent protests against the austerity measures took place in Athens and elsewhere, with at least 120 people injured.
In the end, the Greek government managed to get its controversial austerity package through parliament, but the price was high. Coalition parties had to deal with a number of rebel lawmakers, while at least 120 people were injured in some of the most violent protests Athens has seen in months.
A majority of 199 members of parliament voted to approve the package on Sunday night, with a total of 74 lawmakers casting votes against it. The tough austerity package details €3.3 billion ($4.35 billion) in budget cuts for this year alone, including public-sector layoffs, cuts in the minimum wage and reductions in some pensions.
The two main parties in the coalition government, the center-left Socialists and the conservative New Democracy party, each expelled about 20 rebel deputies from their parliamentary groups after they voted against the package.
The parliament's approval of the austerity package was an essential precondition for the release of the second European Union/International Monetary Fund bailout package for Greece, which is worth €130 billion. EU finance ministers will now meet to approve the package on Wednesday. Without the money, Greece would default in March, when €14.5 billion worth of bonds come due.
During a heated debate, Prime Minister Lucas Papademos had strongly encouraged lawmakers to vote for the austerity bill, calling it a decision of "historic importance." He said the implementation of the program would not be easy. "We are fully aware that the economic program means short-term sacrifices for the Greek people."
In the runup to the vote, George Karatzaferis, leader of the far-right Laos party, a junior partner in the coalition government, had announced that members of parliament with his party would not support the bill. Several government ministers had also resigned in protest at the package.
The bill also provides for a bond swap for private-sector investors that will slash the value of their bond holdings by around 70 percent. If the bill had not been approved, Athens would have missed a Feb. 17 deadline to offer investors the so-called haircut.
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