Greek deputies set to back key austerity bill

[June 29, 2011]  ATHENS, Greece (AP) -- Greek deputies are set to back more austerity measures Wednesday, as riot police clashed with protesters outside Parliament ahead of the vote on a bill that must be passed for the country to get crucial bailout funds.

The bill needs a simple majority to pass and Prime Minister George Papandreou appears to have enough votes even though one of his deputies said he would not be backing the package.

A no vote would push Greece to the brink of default as soon as next month with potentially huge repercussions for Europe's banking sector and global markets.

As deputies debated inside Parliament, riot police fired volleys of tear gas to push back protesters, who were pelting police with bottles and trash and overturning barriers.

Papandreou's governing Socialists hold a five-seat majority in the 300-seat chamber. The bill needs a simple majority of 151 to pass.

Though one of his deputies has vowed to vote against the spending cuts and tax hike, an opposition conservative lawmaker broke with party ranks and said she would back the package.

The package, which involves euro28 billion ($40 billion) worth of spending cuts and tax increases over five years, is a condition for the eurozone and the International Monetary Fund to release the next euro12 billion ($17 billion) installment of the country's bailout fund. An additional bill that details how the austerity measures will be implemented must also be passed in a vote Thursday.

As well as sparking violent protests, the proposals by the Greek government fueled a rebellion inside the governing Socialist Party. Papandreou has struggled to convince his party's deputies to back the bill. He replaced his finance minister earlier this month to assuage the concerns of some lawmakers.

Hours ahead of the vote, it looks like only one Socialist deputy will fail to heed Papandreou's call to back the measures, suggesting that the bill will get at least the 151 votes needed for it to pass. Hopes that the bill will pass have seen European stock markets trade strongly Wednesday and the euro jump towards $1.45.

Alexandros Athanassiadis, many of whose constituents are employed by the Public Power Corporation which is up for privatization, said he maintains his opposition to the bill -- but that he will likely be the only dissenter.

"I have not changed my opinion ... as things stand, I persist in my decision," he told The Associated Press. "I don't think (any other socialist) deputies will vote against. I will be the only one."

Athanassiadis said he opposes privatization of electricity and water companies, but supports the selling of several other state enterprises.

Another deputy who had been on the fence said he will back the bill.

"I place the national interest over my personal dignity ... Voting against the midterm measures will mean bankruptcy," Thomas Rombopoulos said during the parliamentary debate.

Conservative deputy Elsa Papadimitriou also broke with her party ranks -- and said she will vote in favor.

"There is only one act of patriotism: consensus and cooperation," she said. "Fiscal suicide is not an alternative. It's a 'yes' from me."

Deputy Finance Minister stressed the vote -- and the measures in the bill -- were essential for Greece to be able to tame its rampant debt.

"Without additional measures, the budget deficit would go back up and would reach 14.5 percent in 2015," he said. "The same is true for the national debt -- and that's presuming that someone on this planet would keep lending Greece money while we continue to run high deficits."

Wednesday's vote comes against a backdrop of violent demonstrations and on the second day of a nationwide general strike which has brought much of Greece to a standstill.

Protesters had vowed to encircle Parliament to prevent deputies from entering and voting for the bill and a massive security operation was under way, with a large section of central Athens sealed off to traffic.

Scuffles broke out early in the morning as demonstrators attempted to block a major avenue leading to the center of the city, and to Parliament. Riot police responded with pepper spray, and 10 people were treated in a nearby hospital for minor injuries, hospital officials said.

Protesters converged on a car carrying communist lawmaker Liana Kanelli, but let it pass toward parliament because Kanelli said she would vote against the austerity package. However, someone in the agitated crowd threw yoghurt in her face. She wiped it away.

Demonstrators also hoisted ghoulish effigies of men they hold responsible for Greece's misfortune -- Papandreou, new Finance Minister Evangelos Venizelos and Deputy Prime Minister Theodoros Pangalos -- and shook them in the air on sticks.

"Dogs, you look after your masters," they chanted at police. The furious marchers also emptied bags of garbage from municipal containers and lobbed them at the security forces, who stood their ground impassively.

A day earlier, extensive clashes left at least 46 people injured, most of them police, as rioters pelted police with chunks of marble and ripped up paving stones, and authorities responded with repeated volleys of tear gas and stun grenades.

Greece has said it has funds only until mid-July, after which it will be unable to pay salaries and pensions, or service its debts, without the next bailout installment from the eurozone and the International Monetary Fund. The country is also in talks for additional help in the form of a second bailout, which the prime minister has said will be roughly the size of last year's euro110 billion ($157 billion) package.

"Voting these measures is required to maintain our credibility in the (bailout) process," Venizelos said during the debate Tuesday night. "Voting for these measures, regardless of any reservations, is an important, brave act of political responsibility."

[Associated Press; By DEMETRIS NELLAS and CHRISTOPHER TORCHIA]

Derek Gatopoulos, Menelaos Hadjicostis and Elena Becatoros contributed.

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