Austerity bill passed as Athens burns

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IOL pic feb13 greece austerity bill violence

Reuters

Firefighters are seen near a burning building during violent protests in central Athens. The city's historic cinemas, cafes and shops went up in flames on Sunday as black-masked protesters fought Greek police outside parliament, while inside lawmakers decided on a new EU/IMF austerity deal.

Athens - The Greek parliament approved a deeply unpopular austerity bill to secure a second EU/IMF bailout and avoid national bankruptcy, as buildings burned across central Athens and violence spread around the country.

Cinemas, cafes, shops and banks were set ablaze in central Athens as black-masked protesters fought riot police outside parliament.

State television reported the violence spread to the tourist islands of Corfu and Crete, the northern city of Thessaloniki and towns in central Greece. Shops were looted in the capital where police said 34 buildings were ablaze.

Prime Minister Lucas Papademos denounced the worst breakdown of order since 2008 when violence gripped Greece for weeks after police shot a 15-year-old schoolboy.

“Vandalism, violence and destruction have no place in a democratic country and won't be tolerated,” he told parliament as it prepared to vote on the new 130 billion euro bailout to save Greece from a chaotic bankruptcy.

Papademos told lawmakers shortly before they voted that they would be gravely mistaken if they rejected the package that demands deep pay, pension and job cuts, as this would threaten Greece's place in the European mainstream.

“It would be a huge historical injustice if the country from which European culture sprang ... reached bankruptcy and was led, due to one more mistake, to national isolation and national despair,” he said.

The chaos outside parliament showed how tough it will be to implement the measures. A Reuters photographer saw buildings in Athens engulfed in flames and huge plumes of smoke rose in the night sky.

“We are facing destruction. Our country, our home, has become ripe for burning, the centre of Athens is in flames. We cannot allow populism to burn our country down,” conservative lawmaker Costis Hatzidakis told parliament.

The air in Syntagma Square outside parliament was thick with tear gas as riot police fought running battles with youths who smashed marble balustrades and hurled stones and petrol bombs.

Terrified Greeks and tourists fled the rock-strewn streets and the clouds of stinging gas, cramming into hotel lobbies for shelter as lines of riot police struggled to contain the mayhem.

State NET television reported that trouble had also broken out in Heraklion, capital of Crete, as well as the towns of Volos and Agrinio in central Greece.

On the streets many businesses were ablaze, including the neo-classical home to the Attikon cinema dating from 1870 and a building housing the Asty, an underground cinema used by the Gestapo during World War Two as a torture chamber.

As fighting raged for hours, protesters threw bombs made from gas canisters as riot police advanced across the square on the crowds, firing tear gas and stun grenades. Loud booms from the protests could be heard inside parliament.

Before the vote, Finance Minister Evangelos Venizelos told parliament that the alternative to the international bailout - bankruptcy and a departure from the euro zone - would be far worse for Greeks.

“The choice is not between sacrifice and no sacrifices at all, but between sacrifices and unimaginably harsher ones,” he told a stormy debate expected to run well into the night.

Greece needs the international funds before March 20 to meet debt repayments of 14.5-billion euros, or suffer a chaotic default which could shake the entire euro zone.

The EU and IMF say they have had enough of broken promises and that the funds will be released only with the clear commitment of Greek political leaders that they will implement the reforms whoever wins an election potentially in April.

Euro zone paymaster Germany ratcheted up the pressure on Sunday. “The promises from Greece aren't enough for us any more,” German Finance Minister Wolfgang Schaeuble said in an interview published on Sunday in Welt am Sonntag newspaper.

“Greece needs to do its own homework to become competitive, whether that happens in conjunction with a new rescue programme or by another route that we actually don't want to take,” he said.

When asked if that other route meant Greece quitting the euro zone, Schaeuble said: “That is all in the hands of the Greeks themselves. But even in the event (Greece leaves the euro zone), which almost no one assumes will happen, they will still remain part of Europe.”

The bill sets out 3.3-billion euros in wage, pension and job cuts for this year alone.

It also provides for a bond swap to ease Greece's debt burden by cutting the real value of private-sector investors' bond holdings by 70 percent. Greece would have missed a February 17 deadline to offer a debt “haircut” to private bondholders if the vote had not been passed. - Reuters


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JD, wrote

IOL Comments
03:10pm on 13 February 2012
IOL Comments

Hi jandr0. Fair enough. In the late 90’s, Eurozone leaders agreed to a universal lending rate of 3%. Up to 2008 there was a huge build-up of debt in these countries, because of private & mortgage companies taking out huge loans at very low interest rates in the boom, which followed the establishment of the euro. The subsequent increases in wages yearly in southern European countries, combined with the market’s view of them as risky, made them pretty uncompetitive. Germany, which had agreed with unions to hold back on wage increases, benefitted from a surplus as a result of it's strong export markets. To be fair, Greece’s govt. is probably more culpable of financial mismanagement than most other eurozone countries, but 1) unions and companies drove wages too high and could not remain competitive with their northern neighbours. Now they’re in a situation where people got used to the good life and don't want to take the necessary cuts. 2) I’m not sure you can blame the Greek reliance on social grants and culture of tax evasion on the government (there’s a tax deficit per person of over 2000 euro ie: the greek government spends over 2k more on each citizen each year than it collects in tax). There has to be a level of personal responsibility. There’s a worldwide culture of entitlement and people refuse to give up any luxuries they’ve grown used to, but expect the problems to be magically solved and high-paying jobs to be created by their governments, in isolation.

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Gman, wrote

IOL Comments
03:06pm on 13 February 2012
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@ jandr0: Actually JD is right and if YOU actually read past what you see in the media YOU would know this too. Some private individuals are loving the chaos in Greece and loving the fact that they have to take yet more 100s of billions in loans they will realistically never ever be able to pay back, this opens Greece up to being run in the shadows by the international money lenders becasue if Greece doesnt do or say as they like they will simply recall the loans. Greece has officially been sold to private companies. This is just part of the game that has been going on for a very long time. Maybe YOU should enlighten yourself as to the real way the world works and not the fairy tales and stories YOU are brainwashed with.

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@ JD, wrote

IOL Comments
03:01pm on 13 February 2012
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You are half right there, actually private industry owns the govt. not just in greece but a lot of other countries too. Usually the same private enterprises that lend them the money and make massive interests off loans of failing countries.

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Matrix, wrote

IOL Comments
12:04pm on 13 February 2012
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Another example of how evil usury is. Here a whole country suffers because of it not just ordinary citizens.

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jandr0, wrote

IOL Comments
11:11am on 13 February 2012
IOL Comments

@JD: You're claiming something, now prove it. What I see is a GOVERNMENT debt problem, and NOT private industry. Since YOU are making the extraordinary claim that it is private industry, YOU must furnish extraordinary proof. Yet I see no proof or logical argument from you.

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Anonymous, wrote

IOL Comments
08:50am on 13 February 2012
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What now? Tickets to Greece cancelled?

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JD, wrote

IOL Comments
08:48am on 13 February 2012
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You reap what you sow. Ironically enough, if you really understand the causes of the euro zone crisis in Greece specifically, you'll know that in many instances, private industry is more to blame than the actual governments themselves.

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Smartboy_102
I'm a 60 year old man looking to meet women between the ages of 47 and 57.
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sunset22
I'm a 50 year old man looking to meet women between the ages of 40 and 57.
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koolstoof55
I'm a 59 year old man looking to meet women between the ages of 45 and 63.
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