Meltdown in Athens

'Explosive' atmosphere in Athens before bailout vote

al Jazeera,

Greek police have fired tear gas at protesters hurling stones and petrol bombs outside parliament, as politicians inside debated budget cuts.

Lawmakers must pass the unpopular austerity measures to get another bailout from the European Union and International Monetary Fund.

Greek crisis: thousands join protests as MPs debate bailout deal

Police fire teargas at Greeks demonstrating against austerity bill, which sets out €3.3bn in cuts to secure €130bn rescue package

the Guardian,

12 February, 2012

Police fired teargas at protesters outside the Greek parliament as MPs began debating the deeply unpopular bailout deal setting out €3.3bn in wage, pension and job cuts as the price of a €130bn (£108bn) rescue package from the EU and the International Monetary Fund.

Thousands of protesters gathered in the square outside the national assembly building in Athens, but the demonstrations quickly turned ugly, with the crowds facing off against an estimated 6,000 riot police.

Parliamentarians are expected to approve the deal. Greece needs the rescue package – the country's second since 2010 – before 20 March to meet debt repayments of €14.5bn. But the bill has stirred anger on the streets and turmoil within the Greek coalition government.

During the debate a communist MP hurled the pages of the bill on to the floor of the chamber and in fiery exchanges the finance minister, Evangelos Venizelos, warned MPs: "If the law is not passed, the country will go bankrupt."

He said the vote in the 300-seat parliament, which began shortly after 2pm (midday GMT), had to come by midnight "because come Monday morning, banking and financial markets must get the message that Greece can and will survive".

Addressing the nation late on Saturday, the prime minister, Lucas Papademos, warned that failure to back the bill would mean a disorderly default and "set the country on a disastrous adventure".

"It would create conditions of uncontrolled economic chaos and social explosion," 

Papademos said. "The country would be drawn into a vortex of recession, instability, unemployment and protracted misery, and this would sooner or later lead the country out of the euro."

Greece's Communist party, which opposes the cuts, accused the PM of "lying and scaremongering".

Germany continued to pile pressure on the Greek administration, saying Europe needed action, not words. Berlin was instrumental in insisting Athens made deeper cuts after the Greek government presented its budget plans at a eurozone meeting last week, and there is a growing rift between the countries.

"The promises from Greece aren't enough for us any more," the German finance minister, Wolfgang Schauble, said in an interview published in the Welt am Sonntag newspaper. German opinion polls showed a majority of Germans were willing to help, he said, "but it's important to say that it cannot be a bottomless pit".

"That's why the Greeks have to finally close that pit. And then we can put something in there," Schauble said. "At least people are now starting to realise it won't work with a bottomless pit. Greece needs to do its own homework to become competitive – whether that happens in conjunction with a new rescue programme or by another route that we actually don't want to take."

Asked whether the other route meant Greece would have to leave the eurozone, Schauble said: "That is all in the hands of the Greeks themselves. But even in the event, which almost no one assumes will happen, they will still remain part of Europe."

He said the rescue efforts for Greece were proving more difficult than efforts to unify Germany in 1990. "The reason is the realisation that there is a need for change, and dramatic change, still needs to develop further with a lot of people in Greece."

The austerity measures include €300m in pension cuts and a 22% reduction in the minimum wage from about €750 a month. The bill aims to cut Greece's state sector workforce by about 150,000 by 2015. It also provides for a bond swap to ease Greece's debt burden by cutting the real value of private investors' bond holdings by some 70%.

On a day of dire warnings and stormy debate on Saturday, leaders of the coalition told uneasy MPs to support the bill or be dropped from party lists for an election that could happen by April.

At least 20 deputies from the two main parties in the Papademos coalition threatened on Saturday to vote against the bill, but the bulk of the coalition's 236 MPs are still all but certain to approve the package. Six members of the cabinet have resigned.

Venizelos said the deal had to be approved by Sunday or the country would miss a deadline, on 17 February, to offer the debt "haircut" to its private sector bondholders.

Eurozone finance ministers also expect Greece to explain by then how €325m from this year's total budget cuts, as yet unspecified, will be achieved before it agrees to the bailout.

Bailout documents released on Friday left blank the amount of the full rescue package, and Venizelos said Greece might need €15bn more to save its banks, confirming estimates from EU officials.

The EU and the IMF have said they will not release the aid without clear commitments by the main party leaders that reforms will be implemented, whoever wins the next election.





There was some quite good mainstream coverage of Greece on Radio New Zealand this  morning

With Yannis Zabetakis - Science professor in Athens who has been protesting against the austerity measures that Greece needs secure an EU/IMF bailout and avoid default. Kevin Featherstone - has been at the London School of Economics since 2002, when he took up the position of Eleftherios Venizelos professor of contemporary Greek studies; he is also director of the Hellenic Observatory in the European Institute.