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Greek deputies to vote for key austerity bill

By Christopher Torchia

Associated Press

Published: Wednesday, June 29 2011 1:00 a.m. MDT

A protestor throws a panel top of a burning barricade during a demonstration in Athens Tuesday evening June 28, 2011. Greece's beleaguered government is bracing for a 48-hour general strike as lawmakers debate a new round of austerity reforms designed to win the country additional rescue loans needed avoid bankruptcy.

Dimitri Messinis, Associated Press

ATHENS, Greece — Greek deputies are to vote Wednesday on a deeply unpopular austerity bill that has provoked days of rioting in the streets of Athens, with the result of the vote determining whether the country can avoid a potentially disastrous default in the coming weeks.

A day earlier, extensive clashes left at least 46 people injured, most of them police. Protesters have vowed to encircle Parliament to prevent deputies from entering and voting for the bill, and a massive security operation was under way to avert the blockade, with a large section of central Athens blocked off to traffic.

Scuffles broke out early in the morning as demonstrators attempted to block a major avenue leading to the center of the city, and to Parliament. Riot police responded with pepper spray, and at least two people were injured and taken to a nearby hospital.

Services across the country were disrupted by the second day of a general strike that left ferries tied up at port, forced dozens of flights to be canceled or rescheduled and saw hospitals functioning with emergency crews.

The €28 billion austerity bill, and an additional bill to be voted on Thursday that details how it will be implemented, must both pass if the European Union and International Monetary Fund are to release the next €12 billion slice of the country's €110 billion bailout fund — and prevent a default that could drag down European banks and shake the European and world economy.

Prime Minister George Papandreou's Socialists have a slim majority of five seats in the 300-member parliament, and he has faced an internal party revolt over the new punishing four-year program of spending cuts and tax hikes on even those on minimum wages. At least two of his own deputies had indicated they might not vote in favor — but the bill should muster the 151 votes it needs to pass.

Greece has said it has funds only until mid-July, after which it will be unable to pay salaries and pensions, or service its debts, without the next bailout installment. The country is also in talks for additional help in the form of a second bailout, which the prime minister has said will be roughly the size of the first.

"Voting these measures is required to maintain our credibility in the (bailout) process," Finance Minister Evangelos Venizelos said during the debate Tuesday night. "Voting for these measures, regardless of any reservations, is an important, brave act of political responsibility."

Dissatisfaction over the new measures, and the realization that harsh cuts and tax hikes imposed over the past year have not worked as expected, has prompted sharp criticism even from within Papandreou's party and led to a political crisis earlier this month that saw the government nearly collapse.

Papandreou faced down the rebellion by reshuffling his cabinet, replacing his finance minister with Venizos, who had held the defense portfolio, and surviving a confidence vote.

But even prominent Socialists are still voicing objections.

"The austerity measures are not only harsh, not only unfair, but they are also ineffective," Socialist critic Vasso Papandreou, who is not related to the prime minister, told parliament late Tuesday. Still, she said she would grudgingly vote for the bill.

"Greece has many problems but the real problem is the eurozone," said Papandreou, a former EU commissioner. "Europe should be a zone of solidarity, but it is a jungle where the banks can do what they like."

In Tuesday's violent protests, police and health officials said 37 policemen and nine protesters were hurt. Rioters set fire to giant parasols at an outdoor cafe, using some to form barricades, and smashed windows of a McDonald's outlet and other snack shops. Staff at upscale hotels handed out surgical masks to tourists and helped them with rolling luggage past the rioting, over ground strewn with rubble.

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Thanassis Stavrakis and Elena Becatoros in Athens contributed.

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