Greece’s parliament approves austerity measures

View Photo Gallery —  Cutbacks demanded by international lenders have led to a public backlash, with tens of thousands of Greeks flooding into the main squares of cities across the country.

By Michael Birnbaum, Sunday, February 12, 6:10 PM

BERLIN – Greece’s parliament approved far-reaching spending cuts early Monday in a bid to secure a bailout and stave off bankruptcy, as buildings burned in Athens, set ablaze by furious protesters who fear European demands to reshape their economy will further exacerbate a crippling recession.
The measures, which will slash the minimum wage, trim a fifth of government workers and slash entitlement spending, are wrenchingly unpopular in a country already seized by 21 percent unemployment and dim prospects for the future. But European leaders say that Greece will eventually go bankrupt —even with the new $182 billion bailout —if it does not make the changes they are requiring.

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Leaders from the euro zone plan to convene Wednesday to decide whether to give Greece the bailout. Greece must still come up with an additional $432 million in spending cuts by that deadline.
Monday’s vote was the latest skirmish in a more-than-two-year battle, as Greece has struggled with crippling debt and lurching social pain, while Europe has been torn between fear of the consequences of Greek default and anger that leaders there have often failed to live up to their promises.
“There are very few such moments in the history of a nation,” said Greek Finance Minister Evangelos Venizelos said, addressing parliament before the vote. “Our country has an acute issue of survival.”
The latest demands have prompted some of the worst fights, both physically and politically, of the crisis. Ahead of the vote, the smallest member of the three-party coalition that has ruled Greece since November announced it would not support the austerity measures, and six ministers resigned from the cabinet. Leaders of the remaining two parties in the coalition, the right-wing New Democracy party and Socialist PASOK, threatened their members with expulsion if they did not vote to approve the cuts.
And as riots raged outside Parliament on Sunday, hours after a rally that drew tens of thousands of people, lawmakers fought inside the chamber as well. One far-left parliamentarian said that teargas from the protests outside had seeped into parliament, and a Communist Party lawmaker hurled the thick bill toward the dais.
Without a bailout – the second in as many years – Greece will not be able to make a $19 billion debt payment on March 20, leading to a default that could send it spiraling off the euro currency, a fate its leaders said would lead to far more pain for their citizens than the cuts that were approved Monday.
A Greek default could also have harsh consequences for the world financial system, potentially leading to a credit freeze that could throw other teetering countries off their perches. But some European leaders increasingly appear to feel they could withstand what would come.
“The big day is increasingly losing its horror,” German economy minister and vice chancellor Philipp Roesler told ARD television on Sunday, referring to the possibility that Greece might exit the euro zone.