Sun, Feb 12, 2012 - Page 11 News List

Greek Cabinet approves bailout bill

ONGOING TURMOIL:The bill includes provisions to lower the minimum wage by 22%, which caused several lawmakers to resign, saying they could not back such a measure

Reuters,

Birds fly over banners hung by members of a communist party in front on the Parthenon yesterday in Athens, Greece.

Photo: AFP

The Greek Cabinet approved a draft bill spelling out reforms required by the EU and the IMF on Friday, taking Athens closer to getting a new 130 billion euro (US$171.6 billion) bailout after the prime minister warned the alternative was “catastrophe.”

All eyes will now be on parliament, which is scheduled to vote on the bill today. Analysts expect the deeply unpopular package to be adopted, but Greek politics remain highly unstable.

Even after this is done, the EU also wants a further 325 million euros of spending cuts and clear commitments by main party leaders that the reforms will be implemented before it agrees to release the aid.

Greek Prime Minister Lucas Papademos told his turbulent coalition government earlier on Friday to accept the harsh international bailout deal or condemn the nation to disaster.

“We cannot allow Greece to go bankrupt,” he told a Cabinet meeting. “Our priority is to do whatever it takes to approve the new economic program and proceed with the new loan agreement.”

Papademos, the sole technocrat in a coalition of feuding politicians, tried to assert his authority after six Cabinet members resigned over EU and IMF demands for yet more pay, pension and job cuts in return for the financial rescue.

The austerity plan includes lowering the minimum wage by 22 percent, axing 150,000 public sector jobs and reducing pensions.

“It goes without saying that whoever disagrees and does not vote for the new program cannot remain in the government,” he said in televised remarks.

Greece faces bankruptcy unless it gets the funds from the IMF and EU by March 20, when it has to repay 14.5 billion euros in maturing bonds.

“It was approved,” a minister who took part in the Cabinet meeting said about the draft bill.

A former central banker, Papademos tried to raise Greeks’ spirits as the nation enters its fifth year of recession, saying economic growth would return in 2013 despite accusations that the austerity is merely driving Greece into a downward spiral.

Any alternative to the rescue would be much worse, he said in opening remarks using the word “catastrophe” four times.

Earlier, far-right leader George Karatzaferis said he could not back the tough terms attached to the bailout and all four Cabinet members of his LAOS party submitted their resignations, along with two from the socialist PASOK party.

Papademos was not expected to react immediately to the loss of his transport minister and five deputy ministers.

“There will be no reshuffle today [Friday],” a government official said.

Adding to the confusion, Greek media said that two of the LAOS Cabinet members had resigned only under orders from Karatzaferis and would support the deeply unpopular package when parliament votes, possibly today or tomorrow.

The socialist PASOK party, one of three in the “national unity” government, called on its lawmakers to vote for the bailout, and analysts said they still thought parliament would pass the deeply unpopular package.

Outside parliament, police fired tear gas at black-masked protesters who threw petrol bombs, stones and bottles at the start of a 48-hour general strike against the cuts ordered by the “troika” of international lenders. However, the street protests were relatively small compared with last year’s mass rallies.

A group of 35 lawmakers from PASOK, whose public support has collapsed, protested against pressure from eurozone ministers.

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