Greece accepts austerity plan amid protests

Riots rage as Parliament debates cuts

Fifty police officers were injured and at least 55 protesters were hospitalized during rioting in Athens yesterday.
Fifty police officers were injured and at least 55 protesters were hospitalized during rioting in Athens yesterday.

ATHENS - After violent protests left dozens of buildings aflame in Athens, the Greek Parliament voted early today to approve a package of harsh austerity measures demanded by the country’s foreign lenders in exchange for new loans to keep Greece from defaulting on its debt.

Though it came after days of intense debate and the resignation of several ministers in protest, in the end the vote on the austerity measures was not close: 199 to 74 in favor, with 27 abstentions or blank ballots. The Parliament also gave the government the authority to sign a new loan agreement with the foreign lenders, known as the troika, and a broader arrangement to reduce the amount Greece must repay to its bondholders.

The austerity measures mean that Greeks will face a 22 percent cut in the benchmark minimum wage and 150,000 more government layoffs by 2015, among other blows — a bitter prospect in a country already ravaged by five years of recession and with unemployment at 21 percent and rising.


But the chaos on the streets of Athens, where more than 80,000 people turned out to protest, and in other cities across Greece reflected a growing dread that the sharp belt-tightening and the bailout money it brings will still not be enough to keep the country from going over a precipice.

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Angry protesters in the capital threw rocks at the police, who fired back with tear gas. After nightfall, demonstrators threw Molotov cocktails, setting fire to more than 40 buildings, including a historic cinema in downtown Athens, the worst damage in the city since May 2010, when three people were killed when protesters firebombed a bank. There were clashes in Salonika in the north, Patra in the west, Volos in central Greece, and on the islands of Crete and Corfu.

Greece and its foreign lenders are locked in a dangerous brinkmanship over the future of the nation and the euro. Until recently a Greek default and exit from the eurozone was seen as unthinkable. Now, though experts say that the European Union is not prepared for a default and does not want one, the dynamic has shifted from trying to save Greece to trying to contain the damage if it turns out to be unsalvageable.

‘‘They’re trying to lay the ground for it, trying to limit the contagion from it,’’ said Simon Tilford, chief economist at the Center for European Reform, a London research institute. Still, he added, letting Greece go would set a dangerous precedent, and it would be ‘‘fanciful’’ to think otherwise.

Greece’s limping economy yields large trade and budget deficits, and no one but the troika— the European Central Bank, the European Commission, and the International Monetary Fund — is willing to lend it the money it needs to stay afloat. The troika is demanding more concessions to placate Germany and other northern European countries where the bailout of Greece is a hard sell to voters.


For its part, Greece is trying to preserve social and political cohesion in the face of growing unrest, political extremism and a devastated economy that is expected to worsen with more austerity. And the feeling is growing here and abroad that the troika’s strategy for Greece is failing.

The leaders of two of the three major political parties in Prime Minister Lucas Papademos’s interim coalition government — the Socialists and the center-right New Democracy party — agreed on the new round of austerity after days of tense debate, maneuvering, and threats. The leader of the third, the right-wing Popular Orthodox Rally, refused to endorse the measures and later withdrew from the coalition.

In the debate last night before the vote, Papademos appealed to lawmakers to do their ‘‘patriotic duty’’ and pass the measures, saying they would save Greece from bankruptcy in March, when a bond issue comes due that Greece cannot repay without foreign help.

In a sign of how the crisis has frayed the political order in Greece, the three leading political parties all moved swiftly to expel lawmakers who had broken ranks with leaders in the voting.

The Socialists, who governed Greece from 2009 until Papademos was installed last November, ejected 23 lawmakers from their party; the New Democrats, who are expected to gain seats from the Socialists in the next election, ejected 21, and the Popular Orthodox Rally two.


Papademos, a former vice president of the European Central Bank who took office in November with a mandate to negotiate the new loan agreement, acknowledged that the program ‘‘calls for sacrifices from a broad range of citizens who have already made sacrifices.’’ But the alternative, ‘‘a disastrous default,’’ would be worse, he said.