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Greece pushes through more austerity, awaits next bailout payment

The Greek Parliament narrowly pushed through the new, unpopular austerity measures, a key step for the release of more bailout funds from Europe.

By Juergen Baetz and Nicholas PaphitisAssociated Press / November 8, 2012

Petrol bombs thrown by protesters explode near riot police in front of the parliament during clashes in Athens, Wednesday. Greece’s fragile coalition government on Wednesday narrowly approved new austerity measures demanded to keep the country afloat, on the second day of a nationwide general strike.

Lefteris Pitarakis/AP

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Athens

Greece's euro partners won't be able to release the country's next batch of bailout cash at a meeting next week, even though the Greek Parliament narrowly backed more unpopular austerity measures Thursday.

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Germany's Finance Minister Wolfgang Schaeuble said the 17-country eurozone is not yet in a position to make a decision on releasing the funds, as many in Athens may have hoped. As anticipated, the cash-strapped country still has to pass its budget for 2013 while lawmakers in some countries, including Germany, have to authorize the release of funds.

"We're not there yet," Mr. Schaeuble said in Hamburg.

"I don't see how we would get to a decision next week," he said, referring to the meeting of the eurozone finance ministers on Monday. "Not all is lost, but not all is won."

The approval of the austerity bill, which will further cut salaries and pensions and increase taxes, was the key step towards persuading Greece's international creditors to release the next €31.5 billion ($40.2 billion) installment of the country's vital bailout loans.

Without it, the government has said the country will start running out of cash Nov. 16, paving the way to Greece's potential bankruptcy and exit from the euro. That scenario has kept financial markets on edge for the past three years.

However, Germany, the biggest single contributor to Europe's bailouts, has insisted Greece must first pass its 2013 budget to create the basis on which the country's creditors can make a decision to release the new funds.

After the budget vote, which is scheduled for Sunday, the release of the funds still hinges on a report by the so-called troika of debt inspectors from the European Union, the International Monetary Fund, and European Central bank. Though favorable to Greece, it is not expected to be ready in time for the Monday meeting.

In addition, some euro countries such as Germany can only give the go-ahead after their own parliaments have voted on it. Though those votes are not expected to take much time, they add the prospect of further delay.

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