Greek Parliament Approves Austerity Bill

Vasso Papandreou has vowed to vote
against future austerity measures.

20 October 2011


The Greek Parliament approved austerity measures that will very likely ensure they receive an €8billion loan tranche from the European Union and International Monetary Fund. The bill was approved 154 to 144. The narrow margin reflects the predicament of the Greek government. Lenders are demanding cuts to the country’s budget and the public is resisting. Members of the ruling party, PASOK, are also beginning to resist new measures. Vasso Papandreou said, “I will vote in favor, but this is the last time -- I am struggling with my conscience.” The measures passed as workers continue to strike, shutting down many facilities. Reuters reports that unions vow continued stoppages. Banks, schools, and government buildings closed on Thursday. Hospitals ran on limited staff.

Comment – Over 100,000 protesters took to the streets on Wednesday in Athens to oppose the new government measures. A small number of rival youth groups clashed, resulting in 74 people hospitalized. If the protests continue, it is somewhat likely that members of PASOK will vote against future measures. The party is already showing signs of dissension. Failed austerity measures will likely result in Greece not receiving additional loan payments and force the country to default. Pressure against the cuts is mounting. If PASOK loses support, the proposition of alternatives to loans is somewhat likely. One option, previously addressed, is for Greece to leave the Euro-Zone. Another option is to be on a Euro-Zone level different from the countries with greater financial stability.

Source: 

http://www.reuters.com/article/2011/10/20/us-greece-idUSTRE79H1FI20111020

Reliability: 9