October 20, 2011

Austerity vote passes on first reading

With private sector employees involved in the 48-hour strike effort, over 100,000 people were in Athens protesting the austerity vote which got through Greek Parliament on the first reading. Meanwhile nearly everything in Athens was closed down, and the International airport was brought to a halt by a 12-hour walkout.

On Thursday a second vote concerning implementation takes place which puts attention on the agreement clause-by-clause, and could be a tougher fight. With success, Papandreou's government is expected to be able to receive the €11 billion tranche loan payment from the IMF/ECB/eurozone bailout plan. Without the money Greece would be expected to go into (long expected) default, Papandreou's government claiming Greece to run out of money by mid-November.

Coverage:

Financial Times "Greece approves austerity bill on first reading"

Washington Post "Greek lawmakers grant initial approval to new austerity bill; second vote due Thursday"

BBC "Greece MPs back austerity plans amid mass protests"

New York Times"Thousands in Greece Protest Austerity Bill"

"On Wednesday evening, as garbage fires smoldered in the streets, the Greek Parliament approved the new package of austerity measures — and secured crucial rescue financing — with all 154 governing party legislators in Greece’s 300-seat Parliament voting in favor.

The controversial bill includes cuts in wages and pensions as well as thousands of layoffs in the public sector — once a political third rail in Greece’s welfare state. It also changes collective bargaining rules to make it easier to hire and fire workers, a highly unpopular action that economists say is crucial to liberalizing Greece’s economy but that has little popular support.

The bill will not pass into law until a second vote — on the separate articles of the legislation — on Thursday. The measures are expected to pass, even over the reluctance of the governing Socialist Party, which helped build up the welfare state it is now charged with dismantling.

European Union leaders are preparing to meet Sunday to decide on the release of the next, $11 billion installment of aid to Greece, part of a $150 billion bailout engineered last year. "

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