Athens burns as Greece approves austerity cuts

13 Feb 2012, 9:12 pm   -   Source: AFP
0 Comments
Share This
+ Comment
0
Deputies defied 100,000 demonstrators in Athens and Thessaloniki to pass another round of stringent budget measures. (Getty)

Deputies defied 100,000 demonstrators in Athens and Thessaloniki to pass another round of stringent budget measures. (Getty)

Global markets rose after Greek lawmakers approved radical budget cuts to secure fresh aid and avoid bankruptcy after a day of street battles left dozens injured and buildings ablaze.

RELATED

Global markets rose after Greek lawmakers approved radical budget cuts to secure fresh aid and avoid bankruptcy after a day of street battles left dozens injured and buildings ablaze.
  
Deputies defied 100,000 demonstrators in Athens and Thessaloniki to pass another round of stringent budget measures sought by Greece's international creditors in return for a 130-billion-euro ($171 billion) bailout.
  
"If we collapse, we won't be able to fix anything anymore ... the package is the country's only hope," Greek Prime Minister Lucas Papademos said before the tense vote, with thousands of police standing guard outside.
  
Financial markets in Asia welcomed the news with solid gains and Europe opened firmer too but dealers warned that much depended on how the measures were implemented and whether Brussels would now sign off on the deal.
  
In London, the FTSE 100 index of leading shares rose 0.67 percent in opening trade, with Frankfurt's DAX 30 up 0.83 percent and the Paris CAC 40 gaining 0.84 percent. The euro rose to $1.3255 from $1.3181 late Friday in New York.
  
"Despite protestors laying waste to Athens ... Papademos's far darker image of Greece without the bailout was grim enough to coerce a majority out of the parliament," said analyst Jonathan Sudaria at trading firm Capital Spreads.
  
"However, given what has been achieved, gains are seen as only modest as concerns now shift to the implementation risk of the austerity measures."
  
China, Europe's biggest trade partner, warned meanwhile that the eurozone debt crisis had reached a "critical juncture" and would top the agenda at talks between Chinese and EU officials this week.
  
"China is concerned over it," said foreign ministry spokesman Liu Weimin.
  
"We believe that as China's largest trading partner and the largest economy in the world (collectively), it is important for the European Union to resolve this issue."
  
European leaders have called on China, which has the world's largest foreign exchange reserves, to help resolve the crisis but Beijing, while expressing support, has made no firm commitment to provide financial assistance.
  
Athens was coming to terms Monday with scenes of devastation after the violent protests, which left 45 buildings burnt out or badly damaged, and shop windows smashed in the central districts of Athens.
  
Officials put the injured at 54 while the police said 68 of their number were hurt in the disturbances, described as the worst for several years.
  
On Syntagma Square, which adjoins parliament and has become the focus point for the protests, emergency workers on Sunday braved a barrage of rocks and tear gas in addition to petrol bombs.
  
The protesters included trade unionists, youths with shaven heads waving Greek flags, communist activists and left-wing sympathisers, many of them equipped with gas masks.
  
They denounced what they described as blackmail by the international troika of the EU, the IMF and the European Central Bank.
  
"It's not easy to live in these conditions," said 49-year-old engineer Andreas Maragoudakis. "By 2020 we will be the Germans' slaves."
  
Civil engineer Anastasia Papadaki, 27, said "the measures are not the solutions to the problem as they will not bring growth.
  
"It's just the international community blackmailing us."
  
An estimated 80,000 protesters gathered in Athens, police said, matching the biggest turnouts achieved against earlier austerity packages last year, while around 20,000 demonstrated in Greece's second city of Thessaloniki.
  
Finance Minister Evangelos Venizelos told parliament that Greece would be forced to default if lawmakers did not back the austerity measures needed to unlock fresh funding from the EU and the International Monetary Fund.
  
Greek lawmakers also have to back a bond swap agreed with private creditors which will wipe out around 100 billion euros from Greece's debt mountain of 350 billion euros.
  
Venizelos said the bond swap must be done by Friday in order to have enough time arrange payment of 14.5 billion euros in maturing debt on March 20.
  
"If that does not happen, the country will be bankrupt," Venizelos said.
  
The new austerity measures will mean more hardship on ordinary Greeks, involving a 22-percent cut in the minimum wage, deregulating the labour market to make it easier to lay off workers and a package of tax and pension reforms.

 

  • Follow us: 
  • Follow us on Facebook
  • Follow us on Twitter
  • Follow us on Youtube

Join the Discussion

Name
City / Suburb E.g. Artarmon, Sydney
Title
Comment
You have characters remaining.
Validation
What's this?
This is a captcha-picture. It is used to prevent mass-access by robots.
All submitted comments become the property of SBS. They are moderated, so we reserve the right to edit comments and remove HTML tags. Not all submitted comments will be published. Publication does not mean we endorse the opinions expressed. Please read our terms and conditions for more information.