Bloomberg News

Greek Protests Turn Violent in Athens as Samaras Seeks Austerity

November 07, 2012

Greek police beat back protesters outside Parliament with tear gas and water cannons as Prime Minister Antonis Samaras fought for approval of austerity measures demanded by the country’s lenders.

Inside the chamber, Finance Minister Yannis Stournaras withdrew a last-minute proposal to cut parliamentary employees’ pay under pressure from opposition lawmakers and the threat of a wildcat strike that could delay tonight’s vote on pension, wage and benefit cuts. Approval of the legislation is the first of the votes required by Nov. 12 to get a 31 billion-euro ($40 billion) installment of aid from the European Union and International Monetary Fund.

“The issue is to keep the country in the euro,” Stournaras said in Parliament. “This bill is here to ensure that all Greeks participate in the effort to save the country.”

Samaras is seeking to stem defections from his three-party coalition to convince European Union leaders including German Chancellor Angela Merkel that his government is serious about staying in the euro. On paper, he can count on the backing of 175 lawmakers. Democratic Left, a coalition partner with 16 seats, has said it won’t vote for changes to labor laws it says have no fiscal benefit.

Voting ‘Present’

Democratic Left chief Fotis Kouvelis reiterated today that his party would vote “present” on the bill, rather than for or against the legislation. He said the party continued to support the government to keep the country in the euro.

The government has lost as many as four supporters since being formed in June, with the latest defection coming from the ranks of Socialist Pasok, which provides Samaras with the votes he needs for his majority in Parliament.

Discussion of the bill was delayed almost four hours as lawmakers quarreled over procedural issues and the opposition demanded a roll-call vote on a motion to dismiss the measures as unconstitutional. That motion was dismissed by 170 votes to 47.

The debate was held on the second day of a 48-hour general strike. Hospitals, banks, pharmacies and government services shut down and taxis, buses and rail services ground to a halt. Police said at least 50,000 people gathered at a protest rally outside the Parliament starting at 5 p.m., waving banners and chanting anti-bailout slogans. More than 35,000 Greeks marched peacefully in central Athens yesterday.

The 238 pages of proposals in the bill range from raising the retirement age two years to 67 to eliminating Christmas and holiday payments for pensioners and cutting benefits paid to disabled people.

Rolling Strikes

Public Power Corp SA (PPC) workers, opposed to caps on wages for employees in state-owned companies, are holding rolling 48-hour strikes. Five power plants were taken offline yesterday, while the islands of Crete and Rhodes were suffering outages for a second day today.

“This parliament is not what will judge you,” Zoe Constantopoulou, a lawmaker with opposition party Syriza, said in the chamber today. “History will judge you.”

Parliament will convene again on Nov. 11 to vote on the 2013 budget, which provides for 9 billion euros of the savings to bring the deficit to 5.2 percent of gross domestic product next year from 6.6 percent this year. Greece sees the economy shrinking 4.5 percent in 2013, the sixth straight contraction. The European Commission today forecast the downturn next year will be 4.2 percent.

Greece has received 240 billion euros in aid pledges from the EU and the International Monetary Fund since 2010. Under pressure to make more efforts to rein in its budget deficit and deregulate the economy, the country is still struggling to hit its debt-reduction targets, which may endanger further payments under the loan agreements.

Rising Debt

Debt is forecast by the Greek government to rise to 189 percent of GDP next year from 176 percent this year as the economy tumbles.

European Union Economic and Monetary Affairs Commissioner Olli Rehn, speaking at a meeting of Group of 20 finance chiefs in Mexico City, said Nov. 5 that a deal to unlock bailout funds must be made at a meeting of EU finance ministers in Brussels on Nov. 12. A European G-20 official, speaking before Rehn and on condition of anonymity, cast doubt on the prospects for that deadline, saying officials may fall short.

To contact the reporters on this story: Natalie Weeks in Athens at nweeks2@bloomberg.net; Maria Petrakis in Athens at mpetrakis@bloomberg.net

To contact the editor responsible for this story: Stephen Foxwell at sfoxwell@bloomberg.net


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