Greece's coalition party leaders back bailout deal

Morrin wins 3200-meters, Cramer takes 1600-meters

Published: Saturday, Feb. 11 2012 6:15 a.m. MST

Greek communist party member hang banners in Greek and English against EU policies under the temple of Parthenon at the Athen's Acropolis hill on Saturday Feb. 11, 2012. Lawmakers from two parties backing Greece's coalition government are meeting Saturday to consider support for legislation containing new austerity measures, which Socialist leader George Papandreou has urged his deputies to back, saying the country faces disaster if the new bailout deal falls through.

Petros Giannakouris, Associated Press

ATHENS, Greece — The leaders of the two parties backing Greece's coalition government called on their deputies Saturday to back legislation that calls for harsh new austerity measures — essential if Greece is to get a new bailout deal worth €130 billion ($171.6 billion) and stave off bankruptcy.

Debate on emergency legislation approving the new bailout and a debt-swapping deal with private creditors will begin in committee Saturday afternoon. A plenary session will debate and vote on it Sunday. Further legislation detailing the measures demanded by, and agreed with, Greece's public creditors, the European Union and the International Monetary Fund, will be up for vote a few days later. The exact time has not yet been set.

Both leaders — socialist George Papandreou and conservative Antonis Samaras — told their respective parliamentary groups that there is no real alternative to voting for the legislation, except pushing Greece to bankruptcy.

"If we do not dare today, we will live a catastrophe," Papandreou said.

"This (bailout) will give the country the opportunity and the time to stand back on its feet," said Samaras.

Deputies are wary of voting for the measures, which include wage and pension cuts and the prospect of more to come, along with the firing of several thousand civil servants. The demands of the EU and the IMF have caused one of the original coalition parties — the populist right-wing Popular Orthodox Party — to quit the government and withdraw its four members from the cabinet. Two more cabinet members — both socialist deputy ministers — have also quit, citing their disagreements with parts of the austerity package.

Sensing the unease among their MPs, and trying to prevent a wholesale rebellion, both Papandreou and Samaras have called for a yes vote. But whereas Papandreou was vague about the prospect of sanctions against any rebels, Samaras was clear — threatening to expel those who did not vote in favor and to exclude them from the next election. "I want to make it absolutely clear ... rebels or 'bravehearts' have no place in (the party's) candidate lists," he said.

Samaras had opposed the initial bailout, worth €110 billion, that Papandreou, as Prime Minister, had negotiated in May 2010, saying the measures it contained would worsen the crises and result in a deep recession. He now says he feels vindicated, but conditions have worsened so much lately — due to the bad handling of the crisis by the previous socialist government — that social cohesion is at stake. He also blamed Greece's EU partners for lately showing a tendency to punish Greece rather than help it. He added that the turning point for the EU's hardening stance was Papandreou's sudden call in late October for a referendum on Greece's stay in the eurozone.

"The danger now is that Greece's social unrest will spread as a contagion to Europe," he said.

In his speech earlier Saturday, Papandreou defended his government's record, saying that they had inherited a badly damaged economy from the conservatives in October 2009 and that the socialists faced nothing but disruptive criticism throughout their term, through last November.

"We were at war, fighting alone, for two years ... whoever talks about the recipe (of the austerity measures) being wrong is a hypocrite."

Papandreou laid the blame for the worsening crisis in Greece at the doorstep of a "conservative Europe with slow reflexes," saying the Franco-German meeting in Deauville, France, in October 2010, emboldened the markets to fan the flames of the crisis. He called for "real integration of economic policies," a Eurobond, a crackdown on tax havens and a tax on financial transactions.

Samaras insisted the country must hold a snap election once the agreement is in place and the debt swap with private creditors is completed. "Then we will demand a dissolution of the parliament, because (an election) will strengthen our bargaining position ... I have been a deputy since 1977 and never, in my career, has a parliament been so out of step with the wishes of the people," he said, adding that he would not agree to the extension of the mandate of the coalition government. Elections are normally due in October 2013.

While the two parties met, union leaders staged a demonstration outside parliament that attracted about 4,000 protesters, according to the police — while 5-6,000 policemen patrolled the streets of Athens. The protest ended peacefully, but authorities are bracing for a much larger, and possibly violent, one on Sunday evening.

Another 4,000 turned out for a peaceful demonstration in Thessaloniki, Greece's second city.

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