Greece votes for five-year austerity plan

MPs’ decision paves way for more EU and IMF cash but protesters teargassed amid chaos in Syntagma Square At 4.39pm on Wednesday the Greek parliament approved a five-year austerity plan that could sink or save the country. Many hoped the vote might end the saga that has kept Europe – and markets across the world – on tenterhooks over the past week. But no sooner had the MPs cast their ballots and European Union leaders had welcomed the “landmark” vote, the real drama began outside parliament where another approach to democracy saw protesters battle with riot police. Toxic levels of teargas filled the air and Syntagma Square, the nerve centre of Greece’s new resistance movement, descended into chaos. Within minutes, the plaza resembled a warzone. The detritus of battle lay everywhere with burning barricades, smashed pavements, shattered masonry, looted shops, destroyed kiosks and trees. “Dangerous amounts of teargas are being used to terrorise people,” communist MP Athanasios Pafilis said as parliament wrapped up two days of debate on the debt-reduction measures. “It’s an intolerable situation … what we are seeing is chemical warfare and it has to stop.” Protesters, backed by unionists, had come to the square to peacefully denounce economic policies that are widely seen as overburdening the middle class and poor two years into Greece’s debt crisis. On the second day of a 48-hour general strike, opponents had vowed to blockade parliament in the hope of obstructing the vote on the radical €28bn (£25bn) austerity package. But as thousands sought refuge in the cleaner air of subterranean metro stations – where hundreds were treated for respiratory problems – some wondered whether the use of teargas had got out of control. “Unprovoked riot police were firing it all over the place,” said Andreas Skourtis, an architect demonstrating against the measures. “They were clearly working to a very well-organised plan. “This is a government that has gone out of its way to not only keep crowds away but pass the measures no matter what. People are really angry. Civilians have been attacked all over the city centre.” The approval of the belt-tightening programme by 155 deputies – bar one dissident who was immediately expelled from the ruling Pasok socialist party – paves the way for a fifth injection of cash from the EU and IMF. Lenders had insisted that the spending cuts and tax increases be passed before making the €12bn disbursement following months of foot-dragging on reforms agreed in exchange for emergency loans last year. Without the money, the near bankrupt state would have automatically defaulted on its debt, plunging global financial markets into turmoil. “[Economic] collapse would mean we would have to close down our health system, schools, cut pensions by 70 or 80% and civil servants wages,” said the prime minister George Papandreou in a last ditch appeal for MPs to rally around the measures. “Maybe it isn’t clear what a complete collapse of the system means because we have never lived through it before.” Internationally, the relief was instant. While stock markets rallied, Jose Manuel Barroso and Herman Van Rompuy, the European commission and council presidents, called the vote “an important step forward”. A second financial lifeline would be forthcoming, they promised, if Athens also passed an enabling law expediting enforcement of the measures. “With today’s approval of the revised economic programme, the country has taken an important step forward along the necessary path of fiscal consolidation and growth-enhancing structural reform,” they said in a statement. “It has also taken a vital step back – from the very grave scenario of default. This was a vote of national responsibility.” But there is a gnawing feeling that Greece is living on borrowed time. The ballot may have kept insolvency at bay but for Papandreou and his increasingly beleaguered administration the challenges have only just begun. “The problem is outside parliament in the local recession-plagued marketplace and society at large,” said political analyst Kostas Panagopoulos. “The time has come for action … Papandreou has two to three months to do what he has announced and that will be the real test.” Like many analysts, Panagopoulos does not believe Greece’s spontaneous movement of Indignant Citizens – who have turned Syntagma into the focal point of protests – are representative. “I think the vast majority of Greeks realise that the situation is very difficult, that things are going to be painful but they want change.” But the protests are also taking an increasingly violent turn – one that Wednesday’s anger will almost certainly reinforce. “We will stay in this square until the fight is over,” said Skourtis, a first time protester who believes the measures will “destroy” most Greeks. “These policies will bring penury to Greeks for generations to come. They will kill us all.” Greece Europe European debt crisis European banks Europe Global recession Economics Global economy European Union IMF Helena Smith guardian.co.uk

Posted by on June 29, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.