13 Feb 2012

Greece clean up under way after vote for austerity

The rioting clean-up continues in Greece, as EU countries give a cautious welcome to the government’s austerity vote.

EU countries on Monday welcomed the Greek government’s approval of tough austerity measures in return for a huge bailout, but warned that the government has until Wednesday to prove how the 325m euros will be achieved by the cuts programme.

The austerity plan is deeply unpopular in Greece. Thousands took to the streets in protest before the vote, and many Greeks spent Monday trying to repair the damage of rioting.

Adopting the austerity package is one thing, implementing it is another, and this is something in which we have to place great store. Austrian vice chancellor

Police used teargas against protesters during the disturbances, as 150 shops were looted and around 50 buildings, including banks, were set on fire.

On Monday German Chancellor Angela Merkel said that changing the Greek plan is not an option, and called the vote a “very important step”.

EU Economics Commissioner Olli Rehn said he was “confident” that the other conditions of the EU and IMF bailout will be reached before the next Eurogroup meeting on Wednesday.

New austerity measures include:
– Deep pay, pension and job cuts
Minimum wage to be cut by 22 per cent: from 751 euros to 600 euros per month
– 15,000 public sector job cuts

The Austrian vice chancellor was more cautious. “Adopting the austerity package is one thing, implementing it is another, and this is something in which we have to place great store,” said Michael Spindelegger.

The historic Greek vote paves the way for Greece’s European partners and the International Monetary Fund (IMF) to release $170bn in new rescue loans, without which Greece would default on its mountain of debt next month and likely leave the eurozone – a scenario that would further unsettle global markets.

Vote releases $170bn bailout package

The Greek parliament sat at midnight on Sunday to vote on further austerity measures to stave off bankruptcy for the country which has been fighting for months to avoid going bust.

The vote was carried by 199 votes in favour, with 74 MPs voting against. Coalition parties expelled over 40 deputies for failing to back the bill.

The cuts required for the $170bn baillout package to be approved by the EU include a 22 per cent cut of the minimum wage and 150,000 jobs from the public sector workforce by 2015.

Prime Minister Lucas Papademos urged calm, saying violence had no place in a democracy. Lawmakers have also approved a related deal to write off 100bn euros of Greek debt held by private banks.

In all, 150 shops were looted in the capital and 48 buildings set ablaze. Some 100 people – including 68 police – were wounded and 130 detained, a police official said.

A recent poll in a Greek Sunday newspaper showed that dissatisfaction with the new Greek government sits at 91 per cent, up from 80 per cent in December 2011.