melbourne news updates: Greek MPs set for key crisis vote

Thursday, June 30, 2011

Greek MPs set for key crisis vote

A protester armed with a police baton attacks riot police in front of Greece's parliament building during violent protests against austerity measures in Athens, 28 June 2011

MPs have been debating the measures in Athens' parliament building as clashes continued outside

Greek politicians are to vote later on austerity measures that have sparked nationwide strikes and the worst rioting in Athens for more than year.

PM George Papandreou has said that only his 28bn-euro (£25bn) austerity plan will get Greece back on its feet.

If the package is not approved, Greece could run out of money within weeks.

Greek officials say 46 people were injured in the capital on Tuesday, including 37 policemen, after an anti-cuts rally against turned violent.

Police used tear gas against groups of youths in the streets around parliament, and arrested at least 14 people.

The roads of the capital were left strewn with broken paving stones and other debris after the first day of a 48-hour general strike against the planned austerity measures.

Greece's austerity package and its implementation law must be passed in separate votes later on Wednesday and on Thursday for the next instalment of the country's 110bn-euro bail-out to be released by the EU and IMF.

If passed, European officials will also start to finalise the details of a second bail-out - worth an estimated 120bn euros - designed to help Greece pay its debts until the end of 2014.

“[Greece's] destiny is at stake”

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The impact of the Greek vote would be felt worldwide, EU President Herman Van Rompuy said on Tuesday.

A Greek government defeat would send ripples of anxiety right across the eurozone, with Greece facing the prospect next month of becoming the first member state to default on its debts, says the BBC's Chris Morris in Athens.

Late on Tuesday, the newly-named IMF chief, Christine Lagarde, urged Greek politicians to unite to avoid a debt default, saying: "The country's destiny is at stake. If I have a message this evening about Greece, it is a call to the Greek opposition... to join in national unity with the party which is currently in power."

Thousands of protesters marched through Athens' traffic-free centre on Tuesday as public transport ground to a halt during a 48-hour general strike against the austerity measures.

Amid plumes of smoke and tear gas, anarchist rioters - some wearing gas masks - threw petrol bombs and bits of rock chipped from buildings as well as torching two communications vans.

Greece: Crucial datesJune 29: Greek parliament to vote on a new austerity packageJuly 3: Eurozone deadline. EU will sign off latest bail-out payment to Greece - 12bn euros - if austerity package has passedJuly 15: Default deadline: Without the 12bn euros it needs to make debt repayments, Greece will defaultGreece: The moment of truth Can the eurozone carry on?

One man was reportedly stabbed as fighting broke out between rival groups of protesters; some trade unionists tried to persuade anarchists to leave the square, saying their violent protests were only harming the demonstrators' cause.

More than 5,000 police officers were deployed to control the protests.

The strike halted most public services, closed banks and saw hospitals operating on skeleton staff while many flights, trains, buses and ferries were cancelled. Protesters blockaded the port of Piraeus, near Athens, which links most Greek islands with the mainland.

The unions are angry that the government's austerity programme will impose taxes on those earning the minimum wage, following months of other cuts which have seen unemployment rise to more than 16%.

Polls suggest that as many as 80% of Greeks oppose the austerity measures.

What went wrong in Greece?

Greece's economic reforms, which led to it abandoning the drachma as its currency in favour of the euro in 2002, made it easier for the country to borrow money. The opening ceremony at the Athens Olympics

The opening ceremony at the Athens Olympics

Greece went on a big, debt-funded spending spree, including paying for high-profile projects such as the 2004 Athens Olympics, which went well over its budget. A defunct restaurant for sale in central Athens

A defunct restaurant for sale in central Athens

The country was hit by the downturn, which meant it had to spend more on benefits and received less in taxes. There were also doubts about the accuracy of its economic statistics. A man with a bag of coins walks past the headquarters of the Bank of Greece

A man with a bag of coins walks past the headquarters of the Bank of Greece

Greece's economic problems meant lenders started charging higher interest rates to lend it money. Widespread tax evasion also hit the government's coffers. Workers in a rally led by the PAME union in Athens on 22 April 2010

Workers in a rally led by the PAME union in Athens on 22 April 2010

There have been demonstrations against the government's austerity measures to deal with its debt, such as cuts to public sector pay and pensions, reduced benefits and increased taxes. Greek Prime Minister George Papandreou at an EU summit in Brussels on 26 March 2010

Greek Prime Minister George Papandreou at an EU summit in Brussels on 26 March 2010

The government has already had to access a 110bn euro (£95bn; $146.2bn) bail-out package from the European Union and International Monetary Fund, and now needs a second bail-out. Greece's problems have made investors nervous, which has made it more expensive for other European countries such as Portugal to borrow money.

Greece's problems have made investors nervous, which has made it more expensive for other European countries such as Portugal to borrow money.

Eurozone ministers are worried that if Greece were to default it would make it even more difficult for other countries such as Portugal and the Irish Republic to borrow money.

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Recently appointed Finance Minister Evangelos Venizelos acknowledged that the cuts were "unfair", but said they were absolutely necessary, and called on all MPs to back them.

But the main opposition leader, Antonis Samaras of the New Democracy party, said the thinking behind the austerity package was flawed and that tax rates should be lowered rather than raised in order to stimulate the economy.

Mr Papandreou faces opposition from within the governing Panhellenic Socialist Movement (Pasok), with two MPs saying they may oppose the bill.

The party has a slim majority, with 155 seats out of 300 in parliament.

This article is from the BBC News website. ? British Broadcasting Corporation, The BBC is not responsible for the content of external internet sites.