Greece MPs clear way for $170b bailout (original) (raw)

Greek MPs voted to accept a joint European Union-IMF bailout deal this morning, as violent protests raged in the streets of Athens.

In a special late night sitting of parliament, MPs accepted the tough austerity measures needed to secure the 130 billion euro ($170 billion) bailout package and avert a bankruptcy which prime minister Lucas Papademos likened to an economic and political "ground zero".

The bill authorises cuts in wages, pensions and jobs amounting to almost $4.5 billion this year alone.

Critics have warned that the new measures will condemn the Greek economy to a deep downward spiral, and in the lead-up to the vote violence spread around the country as protesters took to the streets.

In central Athens, thousands of protesters battled police in clashes which left buildings on fire and large areas of the capital shrouded in clouds of tear gas.

"Vandalism, violence and destruction have no place in a democratic country and won't be tolerated," Mr Papademos told parliament as it prepared to vote.

"It would be a huge historical injustice if the country from which European culture sprang ... reached bankruptcy and was led, due to one more mistake, to national isolation and national despair."

About 80,000 protesters had massed outside parliament and in the nearby Omonia Square before the vote, facing off against some 3,000 police.

The air was thick with tear gas as riot police fought running battles with protesters who smashed marble balustrades and hurled stones and petrol bombs.

Police said 34 buildings were ablaze in the capital, including the neo-classical home to the Attikon cinema, dating from 1870, and a building housing the Asty, an underground cinema used by the Gestapo during World War II as a torture chamber.

Terrified Greeks and tourists fled the violence, cramming into hotel lobbies for shelter as lines of riot police struggled to contain the mayhem.

The Greek health ministry said 54 people were injured.

The riots also spread to other Greek towns and cities, including the holiday islands of Corfu and Crete and the northern city of Thessaloniki.

Greece needs the international funds before March 20 to meet debt repayments of 14.5 billion euros ($18 billion), or suffer a chaotic default which could shake the entire eurozone.

The EU and IMF say they have had enough of broken promises and that the funds will be released only with the clear commitment of Greek political leaders that they will implement the reforms, whoever wins an election which could come in April.

Eurozone paymaster Germany ratcheted up the pressure before the vote.

"The promises from Greece aren't enough for us any more," German finance minister Wolfgang Schaeuble said in an interview published on Sunday in Welt am Sonntag newspaper.

"Greece needs to do its own homework to become competitive, whether that happens in conjunction with a new rescue program or by another route that we actually don't want to take."

When asked if that other route meant Greece quitting the eurozone, Mr Schaeuble said: "That is all in the hands of the Greeks themselves. But even in the event [Greece leaves the eurozone], which almost no one assumes will happen, they will still remain part of Europe."

Greek finance minister Evangelos Venizelos told parliament ahead of the vote that the alternative to the international bailout - bankruptcy and a departure from the eurozone - would be far worse for Greeks.

"The choice is not between sacrifice and no sacrifices at all, but between sacrifices and unimaginably harsher ones," he said.

ABC/wires