, when Parliament narrowly approved a package of spending cuts and tax increases, along with the sale of government assets, as protesters battled the police in the streets surrounding Parliament.
The complex bill to carry out the austerity measures passed Thursday, with all 154 of the governing Socialists plus one conservative deputy voting in favor. There were 136 votes against it, along with 5 blank ballots and 4 abstentions. The center-right New Democracy Party opposed the bill in principle, as it had the measures themselves, saying they called for too much austerity and would make it more difficult for the Greek economy to grow.
With Thursday’s vote, the spotlight will now shift to Greece’s foreign lenders — the European Union, European Central Bank and International Monetary Fund — which are expected to unlock $17 billion in aid that the country needs to meet its debt obligations through August.
In a joint statement, the president of the European Commission, José Manuel Barroso, and the president of the European Council, Herman Van Rompuy, called the vote “another act of national responsibility” taken under “very difficult circumstances.”
“The conditions are now in place for a decision on the disbursement of the next tranche of financial assistance for Greece and for rapid progress on a second assistance package,” said the European officials, who reiterated their call for consensus among Greece’s political parties.
But even as Greece pushed through the measures required by its foreign lenders, German banks said Thursday that they might follow the lead of French banks and roll over some of Greece’s debt, raising hopes that the private sector would contribute to averting a financial crisis. Some people have criticized that initiative as insufficient.
Prime Minister George A. Papandreou of Greece, who pushed through the austerity measures after a cabinet shuffle and despite dissent within the ranks of his own Socialist Party, said that Thursday’s vote was a significant step toward staving off bankruptcy. “We fought and won a difficult battle, unified, all Greeks together,” he said after the vote.
“Our chief duty now is to extract the country from the crisis as quickly as possible so that hope will return,” he added. “We are moving forward with historic changes. It is the duty of us all to complete, as swiftly as we can, all the major changes that Greece needs.”
The new measures are deeply unpopular. Many Greeks say that the middle class is being squeezed and that the privatizations represent a fire sale of the nation’s patrimony.
Central Athens was generally calm on Thursday, a day after turmoil broke out, with police officers clashing with protesters who threw firebombs and rocks through clouds of tear gas. Shops opened again after a two-day general strike, and shopkeepers swept up broken glass.
Among the new measures are cuts in spending on health and defense, tax increases on heating oil and the self-employed, and reductions in the number of public employees.
They also call for the privatization of about $70 billion in state assets, including the sale of state-owned land and shares in the Public Power Corporation, the betting monopoly OPAP, the Hellenic Postbank, and the operators of the ports of Piraeus and Salonika.
At the last minute, the bill was altered to freeze the salaries of civil servants, effective Friday, and to lower the ceiling below which income for individuals is not taxed; the minimum was reduced to $11,600 annually from $17,400, with more lenient treatment for people with children.
Addressing Parliament before the vote on Thursday, Finance Minister Evangelos Venizelos accused the main opposition party, New Democracy, of “being scared of assuming their responsibility and lacking a counterproposal” to the government’s austerity plan.
He asked the opposition, “Will you join us and show that you’ve grasped the seriousness of the situation as they have in Portugal and Ireland?” Analysts have said that the party’s populist stance has allowed it to score political points, while its leaders also knew that the government would have to take the political risks of pushing the measures through.
A growing number of political analysts in Greece say the government is still hoping for a long-term adjustment of the nation’s debt.
“I am not sure at all that the government really intends to move forward with the actual implementation of the plan, or if it’s counting on the forthcoming readjustment of the Greek debt plan, effectively buying time so as to move on to elections,” said Elias Nikolakopoulos, a professor of sociology at the University of Athens.
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