Greek PM urges parliament pass bailout

12 Feb 2012, 3:22 pm   -   Source: AAP

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Greek PM Papademos has called on parliament to assume a "historic responsibility" on the eve of Sunday's crucial vote on fresh austerity measures.

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Greek Prime Minister Lucas Papademos called on parliament to assume a "historic responsibility" in a televised address on the eve of Sunday's crucial vote on fresh austerity measures.

"The Greek parliament is asked to take a historic responsibility, examine and authorise the new economic program of Greece, the pre-condition for financing the country over the coming years," he said.

He acknowledged that this new round of cuts would heap further hardship on the country -- but the alternative, a default on the country's massive debt, was much worse, he warned.

"The social cost of this program is limited in comparison with the economic and social catastrophe that would follow if we did not adopt it," he said.

He dismissed as demagoguery talk of choosing a default which, he said, would sooner or later have led to an exit from the euro.

"An uncontrolled bankruptcy would have thrown the country into a catastrophic adventure, it would have created uncontrollable economic chaos and social upheaval," he said.

Debating new bailout

Politicians began debating the new bailout and a debt-swap bill on Saturday, amid a nationwide strike on public transport and hospitals that has paralysed much of the country in protest against the measures.

Voting in the 300-member parliament on the measures is to take place on Sunday night.

Additional legislation, such as pension cuts demanded by and agreed with Greece's international lenders, the European Union and the International Monetary Fund (IMF), will be voted on a few days later. The exact time has not yet been determined.

The two main coalition party leaders, Socialist George Papandreou and Conservative Antonis Samaras, told their deputies in separate meetings to back the legislation.

"The other option would be chaotic for the country and we will live through a catastrophe," said Papandreou, adding that his party "had inherited a damaged economy" from the conservatives in 2009.

After initially opposing the first bailout received in May 2010 of 110 billion euros ($A134.92 billion), Samaras did an about-face, insisting that conditions had worsened so much that social cohesion was now at risk.

He threatened to expel anyone who did not vote in favour of the measures, and said snap elections must be held once the agreement was in place and the debt swap with private creditors was completed.

Strong reservations

A number of deputies have expressed strong reservations about the new measures, which include a 22 per cent drop in the minimum wage, public sector layoffs and pension cuts.

The demands by the EU and IMF forced the third coalition party, the right-wing Popular Orthodox Party (LAOS) headed by George Karatzaferis, to quit the government and withdraw its four members from the cabinet.

Two more cabinet members, both Socialist deputy ministers, resigned over the proposed austerity package.

While the two parties met to discuss the fate of the country, Greek trade unions scaled up their industrial action and protests on Saturday and placed an anti-austerity banner on the ancient Acropolis that read: "Down with the dictatorship of the monopoly of Europe."

Approximately 3,000 protesters marched peacefully towards parliament in Athens. Another 4,000 demonstrated in the northern port city of Thessaloniki.

Officials are bracing for a much larger, and possibly violent, turnout on Sunday evening to coincide with the parliament vote.

Ferries remained moored at ports across the country and public transport has been paralysed during the second day of a 48-hour strike. Hospitals were also functioning with emergency staff.

European leaders have given Athens until next week to provide guarantees on the austerity measures and on the economic reforms that Greek leaders had promised in return for funding of 130 billion euros.

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