August 11, 2022

Greek Parliament Approves Implementation of Austerity Plan

The vote followed a momentous day on Wednesday, when members of Parliament narrowly approved the package of spending cuts, tax increases and the sale of government assets, as riots erupted in the streets surrounding Parliament.

The complex implementation bill passed, with all 154 of the ruling Socialists plus one conservative deputy voting yes, 136 against, and five blank ballots and four abstentions. The center-right New Democracy opposition party opposed the bill in principle, as it had the measures themselves, saying they included too much austerity and would not help Greece return to growth.

With Thursday’s vote, the spotlight shifts to Greece’s foreign lenders — the European Union, European Central Bank and International Monetary Fund — which are now expected to unlock $17 billion in aid that the country needs to meet its debt obligations through August.

Central Athens was calm on Thursday, a day after violent riots swept through the city, with police clashing with protesters who three firebombs and rocks through clouds of tear gas. Shops were open again after a two-day general strike and shopkeepers swept up broken glass.

The new measures include cuts in spending on health and defense, tax increases on heating oil and the self-employed and the privatization of about $70 billion in state assets.

Addressing Parliament ahead of Thursday’s vote, Finance Minister Evangelos Venizelos accused the main opposition New Democracy of “being scared of assuming their responsibility and lacking a counterproposal” to the government’s austerity plan. But he appealed again for cross-party consensus. “Will you join us and show that you’ve grasped the seriousness of the situation as they have in Portugal and Ireland,” Mr. Venizelos asked.

But his pleas fell on deaf ears. New Democracy leader, Antonis Samaras, who has rebuffed overtures by Prime Minister George Papandreou several times in the past month, stood firm, saying his party would vote against the implementation bill in principle — but would vote for provisions calling for privatizations and public spending cuts. Analysts have said the party’s populist stance has allowed it to score political points knowing the government would have to take the political risk of pushing the measures through.

At the last minute, the bill was altered to freeze the salaries of civil servants effective July 1, and to lower the ceiling below which income for individuals is tax-free to $11,600 annually from $17,400, with more lenient treatment for people with children.

Niki Kitsantonis contributed reporting from Athens, and Liz Alderman from Paris.

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