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Greece Austerity Bill Triggers Riots, Political Revolt

ATHENS, Greece - Greece's troubled left-wing government was seeking urgent relief from European lenders Thursday, after it pushed a harsh austerity package through parliament, triggering a revolt in the governing party and violent demonstrations in central Athens.

Finance ministers from countries using the euro currency were planning a conference call to consider rescue financing for Greece, while the European Central Bank will mull a request from Athens to increase emergency assistance to troubled Greek banks that have been closed since June 29.

The bill was the first step in meeting requirements for negotiations to start on a desperately needed third international bailout for Greece that will prevent it from crashing out of Europe's common currency, following a deal reached by Prime Minister Alexis Tsipras and other Eurozone leaders after a marathon summit in Brussels last weekend.

In a post-midnight vote, the country's parliament voted 229-64 to implement more austerity measures that include pension reforms and sweeping sales tax hikes. Approval came thanks to pro-European opposition parties who voted in favour, and in spite of deepening dissent within Tsipras' left-wing Syriza party.

Thirty-eight party lawmakers defied Tsipras — nearly one-in-four — by voting against or abstaining. They included Tsipras' powerful energy minister, the speaker of parliament, and Yanis Varoufakis, the former finance minister who headed Greece's bailout strategy until his replacement 10 days ago.

The government described the vote as marking a "serious division" among its lawmakers, and indicated that dissenters in Tsipras' Cabinet would be swiftly replaced.

"Today, Parliament took the first important step for the deal, voting for the difficult measures," government spokesman Gabriel Sakellaridis said.

"But the results of today's vote constitute a serious division in the unity of Syriza parliamentary group," he said. "The prime minister's and the government's priority is the successful conclusion of the agreement in the immediate future."

Greeks have seen a dramatic decline in living standards since the debt-plagued country lost market access in 2010 and had to impose severe spending cuts in exchange for bailout loans from eurozone countries and the International Monetary Fund.

Before the austerity vote, some 12,000 demonstrators had gathered outside parliament in the biggest protest against the government since Tsipras won elections in late January. The rally turned violent when several hundred youths attacked police, torched cars, and smashed office displays.

Police said 37 people were detained and 16 arrested over the hour-long clashes that involved youths hurling rocks and petrol bombs outside parliament, and riot police responding with tear gas and baton charges.

Tsipras said he had little choice other than to accept the harsh terms offered by lenders for the new three-year bailout worth 85 billion euros ($93 billion).

"We had a very specific choice: A deal we largely disagreed with, or a chaotic default," he told parliament ahead of the vote.

Syriza won the January elections on a promise to end bailout austerity, and the government's acceptance of more cuts drew an angry reaction from many of its lawmakers — though none of the attacks were aimed at Tsipras.

Parliament speaker Zoe Konstantopoulou slammed the deal as a product of blackmail, describing the additional poverty it would cause as an act of "social genocide."

The vote came after more than two weeks of capital controls, with banks and the stock exchange shut since June 29 and ATM cash withdrawals limited to 60 euros per day.

Dangerously low on liquidity at banks and with the state practically out of cash, Greece desperately needs funds. It faces a Monday deadline to repay 4.2 billion euros ($4.6 billion) to the ECB, and is also in arrears on 2 billion euros to the IMF.

Negotiations on the new bailout will take an estimated four weeks, leaving European finance ministers scrambling to find ways to get Athens some money sooner.

The European Commission has proposed giving Greece 7 billion euros in loans from a special fund overseen by all 28 EU nations so it can meet its upcoming debts.


This story corrects the date in the first reference to the bank closures to June 29, instead of July 29.


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