Despite riots, Greece pushes ahead with austerity

The Greek Parliament voted last night to slash the minimum wage and public sector jobs in exchange for a bailout, despite public fury that led to Molotov cocktails and tear gas. 

Greek politicians debated new austerity measures until deep into the night yesterday while outside, tens of thousands of protestors chanted "traitors" at the lawmakers, who they accused of selling out Greece.  

Multiple buildings were set alight in downtown Athens yesterday, and riot police battled protesters throwing Molotov cocktails and stones.

Despite the popular anger, Greek lawmakers agreed to slash the government workforce and cut the minimum wage by 20 percent – the price demanded by international lenders and the European Union for a bailout. Though the International Monetary Fund and other supporters of the plan say it will get the country on track for economic recovery, such austerity at a time of record unemployment looks certain to deepen the pain in the short term and increase opposition to Greece's already shaky coalition government.

The European Union, the European Central Bank and the International Monetary Fund, pushed for this second round of austerity measures as a condition for Greece to receive a second bailout package worth 130 million euros ($170 million).

It was the second time in less than seven months that the so-called troika has steered Greece toward more drastic budgetary cuts. Greece remains in a deep recession and Greeks are now coping with an unemployment rate that has reached nearly 21 percent (almost 50 percent for those under 25). 

The vote went ahead even though the Parliament’s Scientific Committee issued a report saying the new measures violate the Greek Constitution.

“I call on the public to show calm,” Greek Prime Minister Lucas Papademos told lawmakers Sunday night. “At these crucial times, we do not have the luxury of this type of protest. Vandalism and destruction have no place in a democracy and will not be tolerated.”

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Athens burning

Local police announced that more than 40 fires were set in the center of Athens. Among the buildings targeted were banks, a cinema, and a Starbucks. About 70 people were taken to the hospital, but no one was seriously wounded.

At around 5 pm local time yesterday, the streets in front of the Parliament were packed. Policemen in plain clothes threw tangerines at the riot police, who fired tear gas in return. This technique of dressing and behaving like unruly protestors is a tactic widely used by the Greek police in order to disperse protests, and in the past has sometimes led to widespread rioting.  

Despite the clouds of tear gas, protestors remained outside the parliament, chanting howling disapproval at lawmakers who they accuse of ceding Greek sovereignty to foreign lenders. Riots broke out in six other cities, mainly targeting the offices of politicians who voted for the austerity measures.

Other citizens registered their protests online. Anonymous, the amorphous international hacker collective, attacked websites belonging to the police, the prime minister, and Parliament.

Fracturing coalition?

On Saturday, LAOS, one of the three parties that make up the unity government, backed out and declared it wouldn’t vote for the austerity measures. Center-left PASOK and New Democracy, the center-right party, are the two parties that voted for the austerity measures. 

Addressing his party prior to the vote, Antonis Samaras, the New Democracy party leader, said “I’m inviting you, with me, to save the country. Today’s vote is one of the most important in the history of this parliament and one of the most difficult for all of us, in terms of politics and our [own] conscience.” 

George Papandreou, the leader of PASOK and a former prime minister who stepped down last year to allow for the unity government said, “This agreement is the best the government could get."

But, there were members of the government who didn’t follow the two leaders. Seven members of the Greek government resigned and the 45 members in the Parliament that voted “no” were removed from their parties.

According to the troika, only major changes in Greek labor laws will boost the country’s ability to compete. Officials say those should begin by March. The minimum wage under the new measures will drop to 600 euros a month from 751 euros. For workers under 25, it will decrease to 510 euros a month. The changes also include cutting 15,000 public sector jobs. A debt write-down by creditors is also envisioned, but its size and conditions are still under negotiation.   

A Greek default and possible exit from the euro has been one of Europe’s main concerns. Last week, German Chancellor Angela Merkel said in Berlin, “I will not participate in pushing Greece out of the eurozone.”

On Wednesday, the finance ministers of the eurozone will meet to approve the second bailout. Without it, Greece won't be able to pay the latest round of debt servicing payments due March 20 and might be forced into default.

Additional reporting by Vaso Trifonopoulou