Greece approves tax overhaul amid austerity protests

Greece’s parliament has approved a controversial overhaul of taxes and pensions despite mass rallies against the measures.

Police said almost 18,000 people turned up in Athens and about 8,000 in Thessaloniki on Sunday against the changes demanded by the European Union and the International Monetary Fund that the government approved in the lead-up to a crucial meeting of eurozone creditors in Brussels.

Security forces fired tear gas to disperse protesters throwing petrol-bombs in Athens.

The reform aims to reduce Greece’s highest pension payouts, merge several pension funds, increase contributions and raise taxes for those on medium and high incomes.

Central Athens was largely closed to traffic, with a significant police presence in the city, although numbers were significantly down on February’s protests when 40,000 people marched in Athens alone.

Al Jazeera’s John Psaropoulos, reporting from Athens, said some self-employed and salaried professionals would end up paying up to 55 percent of income tax if the measures were to be applied.

“People here feel that this bill coming at the end of a whole series of austerity bills over the last eight years simply adds too much to the burden of the average Greek household,” he said.

The austerity measures are part of a package demanded by the EU and IMF in exchange for a $95bn bailout approved last July, the third for Greece since 2010.

‘Failed state’ warning

Alexis Tsipras, Greek prime minister, defended the tax and pensions overhaul on Friday, telling legislators from his Syriza party – which holds a slim majority with 153 seats in the 300-seat parliament – that they would spare the poorest.

Shrinking Greece’s pension system is crucial for preventing “the system collapsing in a few years”, Tsipras said.

Euclid Tsakalotos, Greece’s finance minister, has called on the eurozone to back the changes, warning of a “failed state” if the Brussels talks run aground.

“The elements for closing the first review and providing debt relief are, I firmly believe, all there,” according to a letter from Tsakalotos to the eurozone’s finance chiefs seen by the AFP news agency.

“Nobody should believe that another Greek crisis, leading perhaps to another failed state in the region, could be beneficial to anyone.”

Greece’s budget deficit has expanded as it struggles to keep up with its debt payments, which the IMF believes is unsustainable.

In its official agenda for Monday’s meeting, the Eurogroup said it would review the “progress achieved” by Greece as well as discuss “possible debt-relief measures”.