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Greek Lawmakers Narrowly Approve Austerity Legislation

After days of heated debate, Greek lawmakers voted narrowly on Sunday to approve a fresh set of financial measures aimed at ensuring that eurozone finance ministers will decide this week to unlock billions of euros in badly needed rescue loans from the country's third bailout.

The legislation passed 153 to 145, with all of the government coalition members in Parliament voting in favor. It includes a one percentage point increase in the highest rate of sales tax to 24 percent, higher taxes on coffee, alcohol, fuel and other goods and new rules liberalizing the market for nonperforming bank loans. There is also a measure creating a privatization fund to sell off state assets and utilities, including public transport companies, the post office and the state power corporation.

The legislation also introduces a so-called contingency mechanism that would cut state spending if Greece misses budget targets set by its creditors for the next three years.

Addressing Parliament before the vote, Prime Minister Alexis Tsipras said he had "negotiated hard to secure the chance for the country to stand on its own two feet." He later added: "Today, European leaders get the message that Greece is keeping its promises. Now, it's their turn to do the same."

Kyriakos Mitsotakis, the leader of the main opposition party, the conservative New Democracy, accused the leftist-led governing coalition — which first came to power on a pledge to reverse austerity before signing a third bailout — of "organized political fraud." Mr. Mitsotakis, whose party is leading in opinion polls, said the new taxes would "annihilate everyone" and accused the government of "plebifying the middle class."

Outside the Parliament building, protesters gathered to express their exasperation at yet another round of austerity measures. The ones approved on Sunday came on top of pension cuts and increases to income tax adopted earlier this month.

The vote came two days before eurozone finance ministers are to meet in Brussels to sign off on rescue loans for Greece and decide what kind of debt relief to offer.

Greece and its European creditors have been locked in talks on how to reduce the country's debt burden, which the International Monetary Fund is insisting on before it joins Greece's third international bailout. The bailout agreement, signed last summer, is worth 86 billion euros, or $96.5 billion. It follows two bailouts worth a total of 240 billion euros that Greece's eurozone partners and the I.M.F. granted in 2010 and 2012 in exchange for a barrage of measures that have slashed the economy by a quarter and pushed the unemployment rate to 25 percent.

Last week, the I.M.F. said that Greece would need a lengthy period free from debt repayments to put its finances on a stable footing. But eurozone nations, led by Germany, are reluctant to offer debt relief to Greece, fearing the political impact of obliging the taxpayers bailing out Greece to bear an even bigger burden for the country's past profligacy.

Unless the I.M.F. and eurozone officials find a compromise — or agree to further postpone a decision on the I.M.F.'s participation in the third bailout — a new crisis is likely.

Greece needs fresh bailout loans to pay down some 3.6 billion euros of debt maturing in July. And the prospect of new upheaval in Greece is of particular concern as Europe faces other potentially destabilizing challenges, including a migrant crisis — with Greece a major transit country for thousands of desperate people — and a crucial vote in June on Britain's continued membership in the European Union.

[Source: By Niki Kitsantonis, The New York Times, Athens, 22May16]

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small logoThis document has been published on 24May16 by the Equipo Nizkor and Derechos Human Rights. In accordance with Title 17 U.S.C. Section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes.