Riot police officers run away from fire as anti-austerity protesters throw petrol bombs during clashes in Athens. Photo / AP
Riot police officers run away from fire as anti-austerity protesters throw petrol bombs during clashes in Athens. Photo / AP
Party defections over austerity measures raise spectre of fresh Greek elections.
Greece's approval of austerity measures that were overwhelmingly rejected by their citizens just days ago was a stunning defeat for populist forces that have pushed for a break from years of grinding cuts.
Hours after police and demonstrators clashed in central Athens, Greek MPs passed a bailout bill in a stark turnabout for the Government.
It was the price Greece's lenders demanded for saving the country from economic turmoil. Powerhouse economies led by Germany have enforced austerity as the key to growth.
In the new topsy-turvy reality, leftist Prime Minister Alexis Tsipras was tasked with advocating a stricter version of the austerity he has long opposed. In a sign of his new weakness, 40 of the 149 lawmakers from his Syriza Party abandoned him, saying their nation was taking more of the same toxic medicine that had forced it into five years of penury. The defections threatened the stability of his rule, raising the spectre of fresh elections and even more economic turmoil.
In the short term, the adoption of the new measures was a milestone on the road toward European approval of an up to 85 billion bailout, sparing Greece from surefire bankruptcy and its ouster from the shared euro currency.
Already, banks have been closed for more than two weeks and Greece's economy is slowly suffocating under the pressure.
Greeks "can understand the difference between those who fight with their soul in battle and resist, and those who hand in their weapons and give up with no resistance," Tsipras told MPs in a speech capping the contentious debate. "The outcome of these negotiations is of course not what we wanted."
The defectors included several members of Tsipras's Cabinet. Among the outcomes from the split could be the fall of Tsipras's Government and possible new elections. At a minimum, Tsipras will be tasked with implementing unpopular measures with a greatly weakened base of support. In the end, 229 of the 300 MPs supported the bailout laws, but much of the support came from opposition parties.
As MPs hurled insults at one another, anti-austerity protesters and riot police traded petrol bombs and tear gas outside Greece's Parliament building, the worst such confrontation in years.
There was powerful symbolism in the half-hour burst of violence, with Tsipras and his partners - who not long ago were manning the barricades against the authorities - now overseeing the crackdown on their anti-austerity base.
Yanis Varoufakis, who stepped down as Finance Minister last week, threw his lot with the dissenters.
"How can I possibly vote 'Yes' to monsters and the new Versailles Treaty?" he said in reference to the peace accord that ended World War I and imposed harsh terms on the losers.
Demonstrators in Athens were angry the Government had not used the leverage gained from the referendum on Europe's bailout proposals to win more favourable terms.
"We voted 'No' in the referendum. But now it's like we said 'Yes'," said Vassilis, a 33-year-old engineer.
Firebombs thrown by furious anti-austerity protesters exploded in front of the Parliament. Police fired tear gas to push back protesters who threw rocks and stones as they chanted angrily in Syntagma square.
"We have been betrayed!" shouted a man in a balaclava, as police used pepper spray and gas to stop a crowd breaching a security line blocking off the road to the Prime Minister's office.
Officers could be seen dragging protesters away in handcuffs and police sources said about 40 people had been detained. Four policemen were injured by flying debris and a television van parked nearby was set on fire, along with rubbish skips and a Greek flag.
What's next? • The bailout package includes measures repudiated by voters in the referendum. They include tax hikes, pension cuts and aggressive budget surplus targets.
• Germany's Parliament must give its own endorsement tomorrow. Other eurozone countries will hold parliamentary votes.
• European finance ministers need to figure out how to provide Greece with emergency funding for the next several weeks while bailout details are negotiated.
• Most pressing is a Tuesday deadline for a €3.5 billion payment due to the European Central Bank.
Life just gets tougher for embattled Greeks
Anti-austerity protesters march in front of the parliament. Photo / AP
After the capitulation of Greece to its creditor nations in Europe, Panagiotis Katsis, a retired accountant, did what he does best - the maths.
Under the harsh conditions of Greece's 85 billion bailout, social security will be cut. The 65-year-old calculates that will shave 45 off his 950 a month pay.
Property taxes are also set to rise, so he's budgeting for a hit of about 700 a year. Add creditors' demands to raise national revenue through price increases on a host of foods and he's guessing 35 more on his monthly grocery bill.
"Europe thinks of Greece only as numbers," said Katsis, who supports himself and his wife on his pension. "Cut this. Cut that. We've had five years of this already. We've had enough."
For 11 million Greeks, lean times are about to get leaner. As ordered by its creditors, Greece passed a rash of reforms yesterday. As a result, the cost of life on many Greek islands - which enjoyed sales tax discounts - is set to go up. Many foods will be more expensive. Coffee bars will pay higher taxes. Retirees will shell out more for medicines.
The Greeks are used to austerity. They've lived it since 2010 when, to secure their nation's first bailout, budget-slashing measures led to across-the-board cuts, including the firing of public servants and new taxes.
The pain piled on in 2012, when a second bailout brought even more austerity. Now, another dose is around the corner.
Yet many Greeks are not so much outraged as disillusioned that Greece's creditors - led by Germany - would drive such a hard bargain. Disillusioned with Greek Prime Minister Alexis Tsipras, the political maverick from the far-left Syriza Party who vowed to just say no to European demands but ended up saying yes.
Now, Tsipras has pushed through Parliament some of the most difficult cuts the Greeks have seen. Yet without the 85 billion bailout, it would have been worse. Greek banks faced collapse and a messy exit from the euro currency could have sparked a brutal currency devaluation. But that's cold comfort for many Greeks.
This is a nation that, in some ways, is paying for its sins: for years of high tax evasion; for public overspending and a series of corrupt and inept governments. But after five long years, many believe that they have paid enough.
Tsipras had given his first major interview as head of his party at the Athens coffee shop of Fratzeska Sklavou, 45, and her husband, Kosmas Thanasias, 52, in early 2008. They thought he would hold out at Monday's eurozone summit.
One of the austerity measures on the table was a higher tax for Greek coffee shops that was going to cost their business 1000 a month.
The next morning, they awoke to discover that Tsipras had caved. "We didn't blame him," Sklavou said. "They gave him no choice."
The new tax on coffee shops will hit them when their business is already down 50 per cent.
"We have three choices," Thanasias said. "Cut our profits, which are already shrinking; increase prices and drive away our clients; or cut staff. We're going to go with option one."
For retirees like Katsis, the new round of austerity means another choice. What to cut now?
After a 20 per cent austerity cut to his pension in August 2012, he gave up his hobby - brewing homemade wine - because he couldn't afford the grapes and bottles anymore. With another hit coming, "there's not much left to cut", he said.
Katsis also voted "No" in the referendum. But like so many others who did, he doesn't want cuts - but he also doesn't want to leave the euro. European leaders say Greeks can't have it both ways. Although some have blamed Angela Merkel, Katsis doesn't.
"She is fighting for her country," he said. "I only wish we had someone in Greece who would fight as hard for us."
