Austerity bill OK’d by Greek lawmakers

A gasoline bomb exploded near riot police during a demonstration against new austerity measures outside Parliament in Athens Wednesday.


A gasoline bomb exploded near riot police during a demonstration against new austerity measures outside Parliament in Athens Wednesday.

ATHENS — Greece’s Parliament passed a crucial austerity bill early Thursday in a vote so close that it left the coalition government reeling from dissent.

The bill, which will further slash pensions and salaries, passed 153 to 128 in the 300-member Parliament. It came hours after rioters rampaged outside Parliament during an 80,000-strong antiausterity demonstration, clashing with police who responded with tear gas, stun grenades, and water cannons.


Approval of the cuts and tax increases worth $17 billion over two years was a big step for Greek efforts to secure the next installment of its international rescue loans and stave off imminent bankruptcy.

The country’s international creditors have demanded that the bill and the 2013 budget, due to be voted on Sunday, pass before they consider releasing an already delayed $40.24 billion installment from Greece’s $306.57 billion bailout. Without it, Prime Minister Antonis Samaras says Greece will run out of money on Nov. 16.

Get Talking Points in your inbox:
An afternoon recap of the day’s most important business news, delivered weekdays.
Thank you for signing up! Sign up for more newsletters here

‘‘Greece made a big decisive and optimistic step today. A step toward recovery,’’ Samaras said, adding that he was ‘‘very happy’’ with the result.

Development and growth for the country, which faces a sixth year of a deep recession in 2013, will come ‘‘only with a lot of work, with coordinated action, with investments,’’ he said.

But the close vote was a major political blow to the three-party coalition government, which holds a total of 176 seats in Parliament. The result shows support for continued austerity three years into Greece’s financial crisis is dwindling fast.


‘‘The government now has very little margin to take measures like this again,’’ said Dimitris Mardas, associate professor of economics at the University of Thessaloniki. ‘‘But unless it takes various obvious actions like limiting the black economy, addressing tax evasion, and improving the country’s investment framework, we may end up needing new measures. And then things will be very difficult.’’

Straight after the vote, two of the three coalition parties — Samaras’s conservatives and former finance minister Evangelos Venizelos’s socialists — expelled a total of seven dissenting deputies from their ranks.

Lawmakers from the third, the small Democratic Left, mostly abstained from the vote in accordance with their party’s line. Leader Fotis Kouvelis had said he could not back labor reforms included in the bill.

During hours of acrimonious debate in Parliament, Samaras acknowledged that some of the measures in the bill were unfair, but insisted they were vital to avoid bankruptcy and Greece being forced out of the euro and back to its old currency, the drachma.

‘‘Many of these measures are fair and should have been taken years ago, without anyone asking us to,’’ Samaras said. ‘‘Others are unfair — cutting wages and salaries — and there is no point in dressing this up as something else.’’ But, he said, the alternative was bankruptcy that would trigger financial chaos as the country would likely have to leave the 17-country euro bloc.

The measures are for next year and 2014, and include new, deep pension cuts and tax hikes, a two-year increase in the retirement age to 67, and laws that will make it easier to fire and transfer civil servants who are guaranteed jobs for life.

The reforms aim to lower public debts but will in the process also hurt the economy, which is set to enter a sixth year of recession with unemployment at a record 25 percent.

‘‘You are throwing people on to the street, people who need a few more years till they get their pensions,’’ said Panagiotis Lafazanis of the main opposition Syriza, or Radical Left, party.

Ahead of the vote, about 80,000 protesters braved torrential rain to shout antiausterity slogans.

The rally eventually turned violent outside Parliament, with hundreds of rioters hurling gasoline bombs and chunks of marble at police.

Loading comments...
Real journalists. Real journalism. Subscribe to The Boston Globe today.
We hope you've enjoyed your free articles.
Continue reading by subscribing to for just 99¢.
 Already a member? Log in Home
Subscriber Log In

We hope you've enjoyed your 5 free articles'

Stay informed with unlimited access to Boston’s trusted news source.

  • High-quality journalism from the region’s largest newsroom
  • Convenient access across all of your devices
  • Today’s Headlines daily newsletter
  • Subscriber-only access to exclusive offers, events, contests, eBooks, and more
  • Less than 25¢ a week
Marketing image of
Marketing image of