Greece a step nearer to getting bailout cash

ATHENS, Greece (AP) -- The Greek parliament has narrowly passed a deeply unpopular austerity package that should ensure it gets its hands on vital bailout cash — but at a cost to Prime Minister Antonis Samaras' fragile coalition government.

Lawmakers voted 153-128 for the package of spending cuts and tax increases in a ballot early Thursday, hours after more than 80,000 protesters demonstrated outside on the streets of Athens — some fighting running battles with riot police. The vote means Greece remains on course to get its next loan installment, worth some €31.5 billion ($40.15 billion). Without it, the government has said the country will run out of euros on Nov. 16.

Only two — the majority conservatives and the Socialists — of the three parties in the coalition backed the €13.5 billion austerity 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 of collapse as the third party, Democratic Left, insists it will continue as a coalition member.

Greece has relied on rescue loans from the other members of the 17-country group that uses the euro and the International Monetary Fund since 2010, after it revealed its deficit was much higher than expected and lost access to international markets.

The €240 billion package is released in installments, depending on Greece's progress in taming its deficit and reforming the economy. But 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.

Samaras' coalition faces another test on Sunday, when Parliament is to vote on the 2013 state budget. But this time all three coalition partners are expected to present a united front, although it is unclear whether individual lawmakers will toe their parties' lines.

Greek investors reacted nervously to Thursday's vote, with Athens stocks down about three percent in morning trading.

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

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

The new cutbacks include further, deep pension cuts and tax hikes, a two-year increase in the retirement age to 67, and laws that will make it easier to fire and transfer civil servants who are currently guaranteed jobs for life.

The reforms aim to lower the Greek government's budget debt levels, which stand at 150 percent of its €195 billion gross domestic product. However, they will also have a damping effect on the country's economy, which is set to enter a sixth year of recession with unemployment at a record 25.4 percent.

Police in Athens arrested five suspected rioters during the clashes outside Parliament on Wednesday night, on the second day of a nationwide general strike. Seven policemen were injured in the fighting, in which masked anarchists rained petrol bombs on riot squads, who responded with tear gas and — for the first time in decades — water cannons.

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.