Protests as Greece approves austerity plans
Updated on 06 May 2010
Protesters were out again on the streets of Athens this evening after the Greek parliament approved a controversial austerity package, reports Jonathan Rugman.
Greece's embattled Prime Minister, George Papandreou, has sold his hugely controversial £95bn international financial bailout in a passionate speech to parliament, writes Channel 4 News foreign affairs correspondent Jonathan Rugman.
Speaking to Jon Snow this evening, Jonathan Rugman said students and union workers had gathered outside the parliament building. But the mood was peaceful, with a sense that nobody wanted to repeat the violence of yesterday, when three people were burned to death inside a bank at the hands of anti-government protesters.
He predicted that protests would intensify after the summer, when the austerity measures bite.
With 160 out of 300 MPs, the Socialist PASOK government passed laws on pension and salary cuts, pay freezes and tax rises.
The prime minister told MPs: "The future of Greece is at stake."
The vote took place as public sector workers again took to the streets, joined by bank workers furious at the deaths of three colleagues during yesterday's violence.
The IMF, the rest of the eurozone, foreign lenders and Chancellor Merkel of Germany have collectively held a gun to Greece's head, and he must now endure the shame of doing what they want.
Outside the bank which protestors firebombed yesterday, killing three people, Greeks stopped and stared, clearing tears from their eyes, trying to make sense of the worst political violence here in almost twenty years.
There is still tear gas in the air, lingering from yesterday. Flowers and candles have been placed in front of the burned out bank. Horror at what happened inside is almost the only thing which unites those watching.
"We have reached a red line," says one man, claiming the government's austerity plans are the only way out of Greece's financial crisis.
A woman nearby vehemently disagrees: "I believe the politicians are at fault and have been spending people's money for 35 years," she says. "The politicians have destroyed the people and now they want them to pay for the crisis."
"This is a country on the edge of the abyss" says Greece's president. A country which is clearly struggling to stand united.
One newspaper editorial today described Greece as at its most critical moment since the Second World War - warning that it could self destruct into bankruptcy if government plans are not followed.
And the view in one of Athens's top think tanks, known as ELIAMEP, is that even if Greece starts doing what its debtors want, there’s no guarantee it will finish the job.
"Markets are concerned that Greece may not be able to deliver social peace in hard times" says ELIAMEP's Dr Jens Bastian. "The country does not have a good record of fulfilling its commitments."
Dr Bastian believes the Greek government does have the steel to commit to the 3 year IMF austerity plan. But he says that what happens after that is anyone’s guess.
Will Greece really develop a proper tax system and collect the estimated 23bn euros which slip out of the revenue’s grasp each year? And if not, why should poorer Greeks put up with pay cuts, if the burden of refilling the national coffers is not shared across society?
Greece's parliament itself is an example of state profligacy. It's a job creating machine, with positions doled out as political favours.
Stefanos Manos, a former economy minister, told me 75,000 civil service jobs had been created in the last 5 years and that none of them were needed. That’s on top, he says, of 200 000 jobs in the state apparatus which were already surplus to requirement.
"This is the sort of thing politicians do most of the time to buy up votes," Mr Manos explains.
No one knows if Greece can make the changes its debtors, European allies and political leaders are asking of it, in exchange for the unprecedented Euro 110 billion bailout agreed at the weekend.
What we do know is that any change will be painful and resisted by many, which is what has lenders and foreign investors spooked. Prepare for a summer of discontent.
Discussion: Matina Stevis and Alexander Lambsdorff
Ms Stevis, a Greek journalist, told Jon Snow that what undercut the present situation was that most Greeks felt that had not done anything personally to deserve what was happening.
She said that, in particular, the Greeks blamed politicians from previous administrations - there have been several corruption scandals involving politicians in recent years.
Count Landsdorff, a German politician, stressed that the stability of the eurozone was extremely important. He told Jon Snow his constituents "absolutely" resented having to bail out the Greeks. He said they felt the Greeks had brought the present situation on themselves - "and now all of Europe has to bail them out".
Count Landsdorff said German popular resentment was also directed towards German politicians.
Ms Stevis said some Greeks felt resentment against various parties abroad because they felt they were being forced to do something they did not deserve. Others, she thought, felt grateful that they were being helped.
She said the alternative to the agreed austerity measures was unthinkable. "We have a lot of respect in the way the European Union has dealt with this." But there had been a massive delay in the EU's response to Greek's situation.
Count Landsdorff said Germany was the leading exporter in the European Union and that to have a single currency was an enormous advantage. He concluded: "No, we don't want to see the eurozone fail. No, we don't want to return to the Deutschemark."
