Protests in Greece after cabinet ok's debt deal
Lucas Papademos - Photo EC
(ATHENS) - Thousands of protestors massed in Greece under heavy police watch Saturday after the government approved unpopular budget cuts to get vital rescue funds and avoid the "chaos" of a default.
The coalition government approved in the early hours painful measures demanded by the EU and IMF in return for a 130-billion-euro ($171 billion) rescue package that Athens needs to avoid default in March.
Six members of the coalition have quit the government over the issue.
Plans to slash the minimum wage and make layoffs easier have sparked deep anger in a country where more than a million people -- over 20 percent of the workforce -- are already unemployed.
More than 3,500 people streamed to Syntagma Square in Athens on a second day of protests and a general strike, with riot police on guard after clashes Friday. But the protest was mostly peaceful, with only minor scuffles.
Turnout was affected by the general strike that brought public transport to a halt in the capital. More however were expected to rally in front of parliament Sunday when deputies vote on the austerity measures.
In the northern city of Thessaloniki, police estimated a protest of 4,000.
As cabinet debated the budget cut measures on Friday, six members of the coalition government -- four on the far-right and two socialists -- resigned in protest at the new cuts.
But Prime Minister Lucas Papademos warned that Greece has no choice.
"A disorderly default would plunge our country into a disastrous adventure," he told the cabinet. "It would create conditions of uncontrolled economic chaos and social explosion.
"Sooner or later, (Greece) would be led out of the euro," he warned.
Parliament will vote on the new cuts on Sunday, the Athens News Agency (ANA) reported.
Leaders of the socialist PASOK and centre-right New Democracy parties on Saturday urged their MPs to vote in favour of the deal.
"The new programme is difficult and harsh, but it is our only hope for avoiding extreme situations," former prime minister and PASOK leader George Papandreou said.
New Democracy leader Antonis Samaras told his deputies: "We can begin stabilising with the debt deal because we will remove 85 billion euros (of debt) from our shoulders."
Greece's eurozone partners made it clear this week that Athens had to push through the extra austerity measures to secure the release of further loans under the 130 billion euro bailout pending since October.
Greece needs the money to stave off bankruptcy on March 20, when Athens must repay nearly 14.5 billion euros in maturing debt.
Deputies have to agree to three separate measures Sunday, ANA reported.
They have to approve moves to recapitalise Greek banks; the signing of the the eurozone bailout; and a bond swap with private creditors designed to wipe out around 100 billion euros from Greece's 350 billion euro debt.
Details of the austerity measures will be included in a follow-up law to be introduced in the next two weeks, the agency added.
At least five socialist and conservative deputies have declared their intention to oppose the cuts. In principle however, the two senior coalition partners still have enough support to pass the measures.
Eurozone finance ministers on Thursday delayed a decision on a new bailout, giving Greek officials less than a week to meet tough conditions in exchange for fresh aid.
The ministers want Greek lawmakers to formally approve the measures, which include additional structural spending cuts of 325 million euros for 2012.
They also want a written pledge from coalition leaders that they will implement the reforms, Eurogroup chief Jean-Claude Juncker said. If those conditions are met, the Eurogroup would meet again on Wednesday.
Two German ministers meanwhile stepped up the pressure on Greece in separate interviews.
"The promises of Greece are not enough for us," Finance Minister Wolfgang Schaueble says in an interview with Welt Am Sonntag, due out Sunday, saying Athens still had to implement elements of the previous austerity programme.
Foreign Minister Guido Westerwelle was equally blunt.
"The only thing that counts now are actions," he told the news weekly Der Spiegel. It was not enough to adopt austerity measures, he said: they also had to be implemented. "Not just any time -- but now."
He ruled out any advance payment if Greece did not make the cuts it had promised.