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.
Photo: AFP
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.
“Our lenders are once again presenting the dilemma: either you take the measures or you lead the country to a default,” they said in a protest letter.
The biggest police trade union said it would issue arrest warrants for Greece’s international lenders for subverting democracy, and refused to “fight against our brothers.”
Greek Finance Minister Evangelos Venizelos made clear Greece has little choice but to accept the harsh conditions attached to the bailout, and a plan to halve its huge debt to private bondholders, to avoid a chaotic default next month.
LAOS leader Karatzaferis begged to differ.
“Greeks cannot be hostages and serfs,” he said. “We were robbed of our dignity, we were humiliated. I can’t take this. I won’t allow it, no matter how hungry I am.”
His party has 15 deputies in the 300 seat parliament, dominated by the socialist PASOK and conservative New Democracy parties, which both support the Papademos government.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his