Mon, May 28, 2012, 12:38 PM EDT - U.S. Markets closed for Memorial Day

Greece passes new austerity deal amid rioting

Greece's parliament passes new austerity deal amid riots that engulf central Athens

ATHENS, Greece (AP) -- Greek lawmakers on Monday approved harsh new austerity measures demanded by bailout creditors to save the debt-crippled nation from bankruptcy, after riots in Athens and other cities left stores looted and burned and more than 120 people hurt.

The historic vote paves the way for Greece's European partners and the International Monetary Fund to release $170 billion (euro130 billion) in new rescue loans, without which Greece would default on its mountain of debt next month and likely leave the eurozone — a scenario that would further roil global markets.

Lawmakers voted 199-74 in favor of the cutbacks, despite strong dissent among the two main coalition members.

In response, the Socialists and conservatives expelled 22 and 21 lawmakers, respectively, reducing their majority in the 300-seat parliament from 236 to 193.

Violence was also reported in six other cities, the worst in central Volos where the town hall and a tax office were damaged by fire, police said.

Sunday's clashes erupted after more than 100,000 protesters marched to the parliament to rally against the drastic cuts, which will ax one in five civil service jobs and slash the minimum wage by more than a fifth.

At least 45 businesses were damaged by fire, including several historic buildings, movie theaters, banks and a cafeteria, in the worst riot damage in Athens in years. Fifty police officers were injured and at least 70 protesters were hospitalized. Sixth-seven suspected rioters were arrested and a further 70 detained.

Prime Minister Lucas Papademos urged calm.

"Vandalism and destruction have no place in a democracy and will not be tolerated," Papademos told Parliament just before the vote. "I call on the public to show calm. At these crucial times, we do not have the luxury of this type of protest. I think everyone is aware of how serious the situation is."

Since May 2010, Greece has survived on a $145 billion (euro110 billion) bailout from its European partners and the International Monetary Fund. When that proved insufficient, the new rescue package was approved. The deal, which has not yet been finalized, will be combined with a massive bond swap deal to write off half the country's privately held debt.

But for both deals to materialize, Greece had to persuade its deeply skeptical creditors that it has the will to implement spending cuts and public sector reforms that will end years of fiscal profligacy and tame gaping budget deficits.

As protests raged Sunday, demonstrators set bonfires in front of parliament and dozens of riot police formed lines to keep them from making a run on the building. Security forces fired dozens of tear gas volleys at rioters, who attacked them with firebombs and chunks of marble broken off the fronts of luxury hotels, banks and department stores.

Clouds of tear gas drifted across the square, and many in the crowd wore gas masks or had their faces covered, while others carried Greek flags and banners. Masked rioters also attacked a police station with petrol bombs and stones.

A three-story building was completely consumed by flames as firefighters struggled to douse the blaze. Streets were strewn with stones, smashed glass and burnt wreckage, while terrified passers-by sought refuge in hotel lounges and cafeterias.

Scores of bat-wielding youths smashed property at will for several hours, leaving broken traffic lights hanging from poles, and chairs and tables from looted coffee shops dumped on the street. Ambulances weaved through narrow backstreets to ferry the injured to hospital, dodging burning trash bins and the running battles between rioters and police.

"I've had it! I can't take it any more. There's no point in living in this country any more," said a distraught shop owner walking through his smashed and looted optician store.

Athens Mayor Giorgos Kaminis said rioters tried to storm the City Hall building, but were repelled. "Once again, the city is being used as a lever to try to destabilize the country," he said.

In parliament, Finance Minister Evangelos Venizelos said the new austerity measures were vital to the country's very economic survival.

"The question is not whether some salaries and pensions will be curtailed, but whether we will be able to pay even these reduced wages and pensions," he told lawmakers before the vote. "When you have to choose between bad and worse, you will pick what is bad to avoid what is worse."

The new cutbacks, which follow two years of harsh income losses and tax hikes amid a deep recession and record high unemployment have been demanded by Greece's bailout creditors in return for a new batch of vital rescue loans.

Greece's eurozone partners, meanwhile, kept up the pressure for real reform.

German Finance Minister Wolfgang Schaeuble was quoted as telling the Welt am Sonntag newspaper on Sunday that Greece "cannot be a bottomless pit."

Highlighting previous pledges he said weren't kept, Schaeuble said "that is why Greece's promises aren't enough for us any more."

Asked whether Greece has a long-term future in the eurozone, Germany's Vice Chancellor Philip Roesler said "that is now in the hands of the Greeks alone."

"It is not enough just to give financial aid — they must tackle the second cause of the crisis, the lack of economic competitiveness," he told said ARD television. "For that, they need ... massive structural reforms. Otherwise Greece will not get out of the crisis."

Introducing the legislation Sunday, Socialist lawmaker Sofia Yiannaka said the intense pressure from Greece's EU partners to pass the measures was the result of delays in implementing already agreed reforms.

"The delays have our imprint. We should not blame foreigners for them," she said. "We have finally found out that you have to pay back what you have borrowed."

___

Demetris Nellas in Athens and Geir Moulson in Berlin contributed to this report.

 
  • H  •  3 months ago
    Definition of default - To fail to pay money when it is due

    According to that definition, Greece already defaulted when they failed to repay their first loan. It is absurd to think that the sovereigns forcing banks to take the loss to keep them solvent means otherwise.

    1st time - 50% repaid, 2nd - 30% repaid, 3rd time - are you still giving them money?!
  • mad poet  •  Belleville, Michigan  •  3 months ago
    COMMING SOON TO A THEATER NEAR YOU!!!!!!!!
  • Dave  •  3 months ago
    Half their debt erased. Can the US get half our debt erased?
    • BillM 3 months ago
      Since the treasury printed a third of it, I'd say, "sure, we'll wipe a third of it away because we can print some more..."
  • Emily  •  Cicero, Illinois  •  3 months ago
    Can I get more loans to make minimum payments on my debt for the next 200 years.
    • Vmag83 3 months ago
      I'll take no interest for the next 40 years...
  • Job  •  3 months ago
    by my estimation Greek debt is 350billion for 11million people,US debt is 16 trillion for 310 million people...numbers don't lie.Let's not be too critical of the Greek situation,as our numbers are just as bad,and,like Greece no real plan on the horizon.
    • Rick 3 months ago
      your estimation for the greek debt is off by a factor of over 100. The greeks have been given over 350billlion in the last year alone, not to pay off debt, but just to pay their bills.
    • A. M. Deist 3 months ago
      There is no comparison between Greece and the United States. We have more oil than Saudi Arabia, and are extracting it in numerous areas. The United States has to ability to increase GDP where our deficit and debt won't be as significant as most other countries. We exported more oil in 2011 than we imported and this will continue, along with liquid natural gas.
    • j 3 months ago
      A.M. You made a statement "The United States has to ability to increase GDP" if this is the case why has it not increased tangible GDP in the past 30 years? The numbers now calculate GDP from the service sector which in no way shape or form actually contributes to GDP that expands an economy, it merely transfers money from one section to another. The USA is already 15 trillion in debt, how much more debt needs to accumulate before people like you say enough is enough we need to do something about it? The USA currently borrows 40 cents of every dollar it spends, how much longer you think this can go on for?
  • Patriot Alice  •  3 months ago
    Are these the leaders who approved getting in the huge hole of debt in the beginning? Why would they stop now? Didn't the unions vote in these leaders to continue their borrow and spend policies? We are doing the same thing in the USA, sorry to say...
  • Save our country  •  Austin, Texas  •  3 months ago
    This is what happens when one borrows too much and spends too much. Prosperity is not achieved by borrowing, it is earned with hard work and ingenuity. Watch out America, your government is currently on a course similar to Greece.
    • goldenguy39 3 months ago
      Already there, too late.
    • SamC 3 months ago
      If the US goes down, so will the world. What will all those developing counties do without such a large consumer population to buy their goods?
    • goldenguy39 3 months ago
      not really true anylonger, Bric countries are developed enough now to provide good consumer markets.
  • A  •  3 months ago
    When Iceland defaulted there was peace and clam, life went on without riots or unrest. The bailouts are the problem, not the solution...
  • sandra o  •  3 months ago
    I wonder if their government leaders took a pay cut. I bet they didn't. That is one of the problems we have in America. The cuts aren't equal. Our government sits in their offices and decides how much the people can do without, then go get in their chauffeur driven limos to be driven to their mansions.
    • Lonn 3 months ago
      Sure, because we keep electing the same ones. You know, my representative is fine, its yours that needs to go.
    • Hugh 3 months ago
      In 2010 I was looking at the voting trends when Obama was elected. Here i n OZ voting is compulsory about 1 1/2% failed to vote here. They get a fine of about $75 I believe?Your USA Govt. figures stated that 30% of your people didn't vote. That was 80 million people. Apathy is the main reason Govt.& Wall street cont. debt.
    • Gee 3 months ago
      Apathy yes. But it is because the way the US election process is set up. None feels that their vote counts because basically it doesn't. The establishment puts out the person they want the people to vote for and push all competition to the side. Those that do vote generally vote for the person that the establishment wants.
  • mactruth55  •  3 months ago
    Cut your childs allowance and watch the tantrum start. Riots are the adult version.
  • RUNNER1200  •  3 months ago
    I'm afraid this has just postponed the inevitable and wasted billions more euros.
  • slick24301  •  Roanoke, Virginia  •  3 months ago
    Looking like this round of bailout money will need to be used to repair the country instead of repay debts. Knowing these riots aren't over and way more damage is gonna be done as the Austerity measures take effect. Arab spring anyone?
  • George  •  3 months ago
    Goodbye Euro!

    Hello Gyro!
  • ANONYMOUS  •  Livingston, New Jersey  •  3 months ago
    Obama, I wonder if it bothers him looking at the result of socialism. Europe is his idea of how government should be. Democrats, are you totally brain washed or is there a tiny bit of our American heritage and freedom running through your veins. If you elect the worse anti freedom president in our history then you are truly traitors to this nation.
  • THE WORD OF THE WEST  •  Prescott, Arizona  •  3 months ago
    AND NEXT IS..... Italy, Portugal, Ireland, Spain-------PICK ONE.
  • Da Bears  •  3 months ago
    Ha... you guys seem to think defaulting is some miracle solution to all of life's problems and that it somehow makes your future nice and easy... that's hilarious!
  • Joey Biden  •  Northbrook, Illinois  •  3 months ago
    I'll gladly pay you tuesday for a hamburger today.....
  • RAZOR  •  3 months ago
    No need to buy stocks right now, as Israel will be pounding Iran very shortly, creating a downturn in the markets that will last for at least a few weeks or months.
  • FIREINTHEHO  •  3 months ago
    Socialist lawmaker Sofia Yiannaka gets it "The delays have our imprint. We should not blame foreigners for them," she said. "We have finally found out that you have to pay back what you have borrowed." We can only hope that the rest get it, for their sake.
  • Bluejacket  •  Columbus, Ohio  •  3 months ago
    Sheer brilliance, destroy your building to keep tourist away. What a bunch of morons, protesting will only keep people and dollars away
 
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