More belt-tightening measures from Parliament, fire on streets

More belt-tightening measures from Parliament, fire on streets

More belt-tightening measures from Parliament, fire on streets

Greece’s Prime Minister Antonis Samaras votes during a Parliament session in Athens on new measures. REUTERS photoS

Greece’s Parliament passed a crucial austerity bill early yesterday in vote so close that it left the coalition government reeling from dissent, under the shadow of clashes between the police and angry protesters.

The bill, which will further slash pensions and salaries, passed 153-128 in the 300-member Parliament. It came hours after rioters rampaged outside Parliament during an 80,000-strong anti-austerity demonstration, clashing with police who responded with tear gas, stun grenades and water cannons, The Associated Press reported.

Approval of the cuts and tax increases worth 13.5 billion euros ($17 billion) over two years was a big step for Greek efforts to secure the next installment of its international rescue loans and stave off imminent bankruptcy. The country’s international creditors have demanded that the bill and the 2013 budget, due to be voted over the weekend, pass before they consider releasing an already delayed 31.5 billion euros installment from Greece’s 240 billion euros bailout. Without it, Prime Minister Antonis Samaras says Greece will run out of money on Nov. 16.

“Greece made a big decisive and optimistic step today. A step toward recovery,” Samaras said, adding that he was “very happy” with the result.

Development and growth for the country, which faces a sixth year of a deep recession in 2013, will come “only with a lot of work, with coordinated action, with investments,” he said.

German Foreign Minister Guido Westerwelle welcomed a sweeping austerity package passed by Greek lawmakers in a bid to unlock international aid needed to save the country from bankruptcy, Agance France Presse said.

During hours of acrimonious debate in Parliament, Samaras acknowledged that some of the measures in the bill were unfair, but insisted there were vital to avoid bankruptcy and Greece being forced out of the euro and back to its old currency, the drachma. “This (bill) will finally rid the country of drachmophobia,” he said. Below are the keynotes from the new round of painful measures.

RETIREMENT: Already raised from 60 to 65 in 2010, the legal retirement age goes up again, this time to 67. The change will take place from January 1 and is widely expected to see a flood of officials trying to retire before the end of the year.

Additionally, two of the 14 pension payments given each year will be scrapped and cuts of between five and 15 percent will be made on pension payments exceeding 1,000 euros ($1,280) a month.

PUBLIC SECTOR: The new law shatters a Greek taboo by opening the way for the elimination of public sector jobs by scrapping administrative positions and placing workers on unpaid leave if they have been convicted in criminal courts or by disciplinary panels.

Other measures include the elimination of two bonus monthly salary payments and additional cuts for university workers, magistrates, hospital doctors, fire fighters, the army and police. The salaries of mayors and local council members will be halved and hiring frozen until the end of 2016.

WORKPLACE DEREGULATION: The law provides for a reduction and a cap on severance pay, and whittles down how much notice employers must give when a worker’s job is cut. The minimum wage will be frozen at 580 euros per month until 2016 and 511 euros for those aged under 25. The move follows a February cut of almost 200 euros. Protected sectors, including taxis, transporters and other businesses will be opened to competition.

HEALTH AND WELFARE: Public spending and social benefits will endure new cuts and the welfare state is expected to undergo an anti-waste reorganization.

New hikes on petrol and tobacco taxes and the end of farmer exemptions.