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.

|
Lefteris Pitarakis/AP
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.

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.

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.

Schaeuble's comments strongly suggest an interim financial arrangement for Greece may have to be agreed.

Sunday's budget vote in Athens represents another test to the coalition government of Antonis Samaras. Thursday's vote in favor of the €13.5 billion austerity package came at a cost for the fragile three-party coalition government.

Lawmakers voted 153-128 for the package, hours after more than 80,000 protesters demonstrated outside in Athens – some fighting running battles with riot police.

Only two – the majority conservatives and the Socialists – of the three parties in the coalition backed the package. But there was also dissent in those ranks, with seven lawmakers expelled for failing to back the measures, and an eighth saying he was leaving the Socialists to continue as an independent member of parliament.

Nevertheless, the government is not in imminent threat as the third party, the Democratic Left, which abstained from the austerity vote, insists it will continue as a coalition member. The three parties are expected to present a united front in the budget vote.

Greece has relied on rescue loans from its euro partners and the IMF since 2010. In return, it has had to implement a series of austerity measures which have hit the economy hard. Greece is set to enter its sixth straight year of recession.

Figures Thursday showed unemployment figures up at 25.4 percent in August, increasing from 24.8 percent in July and 18.4 percent the year before. More than 1.2 million people in this country of barely 10 million are now unemployed, with 58 percent of all young people aged 15-24 are unemployed.

Greece's €240 billion package is released in installments and is dependent on prescribed budget targets and reforms. The latest payment has been delayed for five months, due to political uncertainty in the spring that forced two national elections in as many months and subsequent delays in agreeing on the new cutbacks.

Schaeuble acknowledged the Greek government's progress "despite the protests and the general strike" but he also cautioned that more needs to be done.

Broad-circulation newspaper Ta Nea daily said in an editorial that Athens must now ensure it receives the new bailout payment in time, and kick start the economy.

"Nobody can imagine that in four months' time (Greece's creditors) will be demanding new salary and pension cuts," the paper said. "Greece cannot take it — and in any case the government will not survive it."

Police in Athens arrested five suspected rioters during the clashes outside Parliament on Wednesday night, on the second day of a nationwide general strike.

Unions have pledged to hold new strikes and protests, and on Thursday taxi drivers and Athens metro, tram and urban rail workers walked off the job.

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

QR Code to Greece pushes through more austerity, awaits next bailout payment
Read this article in
https://www.csmonitor.com/World/Latest-News-Wires/2012/1108/Greece-pushes-through-more-austerity-awaits-next-bailout-payment
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe