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Europe
Greece set for further vote on cuts package
Second day of voting on government's divisive austerity package follows overnight clashes that rocked the capital.
Last Modified: 30 Jun 2011 02:26

Greece's government expects to pass a second austerity bill to pull the country back from default by securing more funds from the European Union and the International Monetary Fund.

Lawmakers will vote on Thursday on the second of two austerity bills that are key to receiving aid from the EU and IMF, after endorsing an initial law on Wednesday to slash $40bn off the national debt.

"Today the parliament will actually look at the implementation of what it agreed yesterday," Al Jazeera's Barnaby Philips reported from Athens.

"This is very important because Greek governments over the years - but perhaps particularly under the extraordinary circumstances of the last 18 months - have really struggled to enact legislation which they put into place, for example on cracking down on tax evasion and so on."

The government of Prime Minister George Papandreou won the first vote by 155 to 138 votes.

But the package of taxes, spending cuts and privatisations has angered many Greeks, with thousands taking to the streets, and police clashing overnight with protesters ahead of Thursday's vote.

Clean-up operation

Central Athens, ground to a halt during violent protests and a 48-hour strike by powerful public and private sector unions. Teams of street cleaners on Thursday swept up broken masonry and shattered glass after the night of clashes.

"They [police] are certainly on alert," Philips said. "But at the moment it's all about a clean up in the city centre after two days of violence and a two day general strike," he added.

The five-year austerity package will allow Greece to secure a second bailout of $17bn of emergency loan funds from the EU and the IMF on top of last year's $157bn bailout.

Papandreou, who reshuffled his cabinet earlier this month to secure support for the bills, said he was determined to push through reforms.

"Today, I am more determined than ever," he said earlier. "Now is the time to tackle everything that is wrong with everything that hurts us, that holds us back."

Europe hails vote

Across Europe, officials hailed Wednesday's vote as an act of "national responsibility" and urged Greek MPs to follow up with another positive vote on Thursday.

"That's really good news," German Chancellor Angela Merkel said on her way out of an economic forum in Berlin. Germany is Greece's biggest creditor.

Relief was the main response from the markets. Soon after the vote, the euro rose against other world currencies, including the American dollar.

Investors around the world cheered the news, but protesters, fighting tear gas, hurled whatever they could find at riot police and tried to blockade the parliament building.

Christine Lagarde - named the next head of the IMF - called on Greece's opposition parties to offer support. The IMF provides about 30 per cent of Greece's bailout fund.

European Commission President, Jose Manuel Barroso and European Council President, Herman Van Rompuy, said in a statement that the Greek parliament's approval of the bill is a "vital step back" from a debt default.

Unions to continue agitation

Thursday's vote will enable individual budget measures and create a privatisation agency, but unions have vowed to oppose privatisations and other austerity steps.

Wednesday’s vote took place as clashes between police and protesters broke out outside parliament, with the booms of stun grenades and tear gas resonating across the square outside the building.

Riot police fired volleys of tear gas at swarms of young men who were hurling rocks and other debris as well as setting fire to rubbish containers.

Most of the anti-government protesters who marched to the square stayed clear of the fighting, but they vented their anger at the political establishment with chants and insults.

Speaking to Al Jazeera, Matina Stevis, a Greek journalist, said: "I can almost hear the sighs of relief from the rest of Europe, but this is not good news, it has been an incredibly dramatic day in Athens."

Stevis said that she was worried that the austerity package was too harsh and unimplementable.

Source:
Al Jazeera and agencies
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