Suzanne Staton' blog: Greece Moves Forward on New Austerity Bill

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Alkis Konstantinidis/European Pressphoto Agency

Tens of thousands of Greeks demonstrated outside of Parliament.

By RACHEL DONADIO and NIKI KITSANTONIS

Published: October 19, 2011

ATHENS ? Despite one of the largest demonstrations in Athens in months, the Greek Parliament took the first step Wednesday night toward pushing a new raft of austerity measures into law and securing crucial rescue funding by approving a bill in principle.

Hopes of Big Deal in Europe, Then Denials (October 19, 2011)

Simela Pantzartzi/European Pressphoto Agency

A gasoline bomb thrown by demonstrators burned near riot police officers guarding the parliament in Athens on Wednesday during an anti-austerity protest. More Photos �

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The controversial bill ? which includes additional wage and pension cuts, public sector layoffs and changes to collective bargaining rules ? passed with all 154 governing party legislators in Greece?s 300-seat Parliament voting in favor. There were 141 votes against the bill with five legislators absent from the roll call. The bill cannot become law until a second vote ? on the separate articles of the legislation ? on Thursday. The measures are expected to pass.

Earlier, skirmishes between demonstrators and the police had broken out outside the Parliament as tens of thousands of Greeks took to the streets at the start of a two-day general strike called by the country?s two main labor unions. A crowd of dozens of youths took advantage of the moment to smash several storefronts and begin looting.

The police put crowd estimates at around 80,000 people; some news Web sites said more than 100,000. The police would not release official figures yet.

A spokesman for the Athens police said that 38 officers and three demonstrators were hurt in Wednesday's clashes. Greek media said at least six demonstrators were injured. Police said five people were arrested and another 28 detained briefly for questioning.

The debt-ridden government must pass the austerity measures to secure the next installment of aid from the European Union. Only that will avert a default next month that could shake the euro zone and reverberate through the global economy.

European Union leaders are preparing to meet Sunday to decide on the release of the installment, $11 billion, part of a $150 billion bailout engineered last year. They will also be looking at a much broader European rescue designed to protect the bloc should Greece default.

On Wednesday, shops, bakeries and gas stations closed. Most international travel was suspended, with many flights canceled, the national rail service halted and ferries moored in port. Public transportation was running on a limited service to enable workers to attend protest rallies. Tax offices, courts and schools shut down, hospitals were operating with only emergency staff and customs officials walked off the job.

Civil servants, who have been the most vociferous in their protests, continued sit-ins at ministries and state agencies, obliging government officials to meet in other venues including the Parliament building, which was the scene of violent clashes between protesters and the police in June when the last set of austerity measures was voted into law.

The skirmishes came as small groups of demonstrators wearing hoods and armed with clubs and flags began throwing rocks at the police outside Parliament. The police fired back tear gas. Some demonstrators set fire to a guard booth. Blocks away, demonstrators set fire to garbage dumpsters, which are piled high with trash due to a recent strike by garbage collectors.

Many in the crowds said they did not normally protest, but that the situation had evolved dramatically in recent months.

?We?ve reached a certain limit,? said Vasia Retsou, 30, a public school kindergarten teacher, who said she had come to protest for the first time, as she marched in a group of students.

Anastasia Dotsi, 70, a retired bank worker, said anger had driven her out to protest. ?We have been crushed as a people,? she said. She said her son and daughter, who both work in the private sector, had not been paid in months and were struggling to pay their mortgages and support their families.

?There?s no precedent for this,? Ms. Dotsi added. ?I have never been a leftist, I voted for Pasok? ? the Socialist Party of Prime Minister George Papandreou ? ?I consider myself a middle-class person. But they?ve pushed us to become extremists.?

As she stood at the base of Syntagma Square, Maria Sarrafidou, 53, a psychiatrist, said that three psychiatric care centers where she had worked had closed down in recent months. At the same time, she added, she sees more patients in her private practice, but they pay her less.

?Mostly panic disorders,? she said. ?In the last two years I?ve seen children and adults. They have no hope for the future. They wait and wait, this is the most difficult part,? she added. ?They don?t know what?s going to happen.?

The two labor unions that called for the general strike, which represent about 2.5 million workers, are leading resistance to the new package of cutbacks. The measures include additional cuts in wages and pensions, thousands of public-sector layoffs and changes to collective-bargaining rules.

As with the last vote on austerity measures, in June, the latest round of votes are fraught. The governing Socialist Party has a fragile majority of four in the country?s 300-seat Parliament, and some lawmakers are said to be wavering. One legislator, Thomas Robopoulos, resigned his seat in protest on Monday, although he was replaced by another Socialist deputy and so his move did not narrow the government?s majority. Another, former labor minister Louka Katseli, has said she would reject one article in the bill on collective bargaining.

Resistance is limited, with most governing party legislators expected to approve the changes, and support from a smaller opposition party is possible. But the government was taking no chances. In a bid to galvanize support on Tuesday Mr. Papandreou appealed to Socialist lawmakers to put the common good above personal concerns.

?We must endure this battle so that the country can win, we must be calm and rise to the challenge,? he said, noting that passing the new measures were crucial to clinching critical rescue funding from foreign creditors.

?The vote will boost our negotiating position, it will give us strength for the E.U. summit,? he said. The key goal for Greece, Mr. Papandreou said, was ?to stay in the euro zone.?