Greek Parliament Approves Austerity Plan

Athens – The Greek Parliament voted Wednesday to back a bitterly contested package of austerity measures, clearing the way for crucial international lending to stave off default.

The Socialist Party of Prime Minster George Papandreou won by a simple majority, 155 to 138, with all but one lawmaker from the party voting in favor and one opposition deputy voting crossing party lines to support the measure. (Five others voted present, and two members were absent.)

The passage of the austerity measures was a decisive step that helps clear the way for the European Union, the European Central Bank and the International Monetary Fund to release $17 billion that Greece needs to pay its expenses through the summer, and begin work on a second rescue. The shape and size of the new bailout could become clear at a meeting on July 3 of euro zone finance ministers in Brussels. Stock markets, which began rallying earlier in the day across Europe and much of Asia amid indications that the measures would be approved, moderated after the vote. Investors had feared that a collapse in Greece might have repercussions throughout the international financial system. Two other European Union countries — Ireland and Portugal — have also turned to international lenders for assistance.

Mr. Papandreou and Antonis Samaras, the leader of the main opposition party, New Democracy, clashed in Parliament just before the vote, accusing each other of letting down the country.

ALSO SEE: Inside Greek’s General Strike: Video Report From Athens As Thousands Protest Sweeping Austerity Cuts

“All of Europe knows that your party is responsible for the current situation,” Mr. Papandreou told Mr. Samaras, alluding to the debt that ballooned in 2009 when New Democracy was in power. Mr. Papandreou, who made several failed overtures to the opposition for political consensus on the austerity measures, made a last-ditch appeal to the conservatives to back the program. “Don’t bet on failure,” he said.

The prime minister said the European Union was also to blame for failing to call the previous government on its dubious statistics. But Mr. Papandreou said Greece’s foreign creditors — the European Union and the International Monetary Fund — had given “a vote of confidence in the Greek people” by offering rescue financing.

Outside Parliament, protesters had massed for a second day in Syntagma Square, shouting, “Traitors, traitors!” and the police repeatedly fired tear gas to maintain control before and after the vote. The demonstrators, the majority of whom were peaceful, came prepared with surgical masks to protect against the gas.

On hearing the result of the vote, some outraged protesters waged running battles with police in the streets around the Parliament, television images showed.

The measures approved Wednesday include tax increases, wage cuts and the privatization of 50 billion euros, or about $72 billion, in state assets. A second vote will be held Thursday to enact the measures, with crucial sticking points expected to include the timing of the privatizations, especially of the state electric utility, the Public Power Corporation, whose powerful union has close ties to the Socialists.

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The vote was conducted by roll call after several hours of debate in which most Socialist legislators said they would back the measures, in some cases only grudgingly, and with most stressing that patriotic duty must go before party ideals.

Among the Socialists, only Panagiotis Kouroublis opposed the measures. Another, Alexandros Athanassiadis, who had expressed extreme opposition to the planned privatization of the Public Power Corporation, surprised Greece by voting in favor of the program, saying Mr. Papandreou’s pledges to guarantee transparency in the selloff of the utility had reassured him.

Elsa Papadimitriou, a legislator from New Democracy, voted for the measures. Breaking ranks with her party and declaring herself an independent, Ms. Papadimitriou said she hoped that the government would not disappoint her, calling her vote “the most difficult but valuable decision of my political career.”

“There is only one act of patriotism: consensus and cooperation,” she said. “Fiscal suicide is not an alternative.”

The nation’s unions turned up the heat on legislators on Tuesday when they began a 48-hour general strike — the first time they had walked out for more than 24 hours since democracy was restored to Greece in 1974 after a seven-year military dictatorship. The police called in reinforcements Wednesday to cordon off streets near Parliament to ensure that protesters did not block legislators’ access to the building, with 5,000 officers on the job.

Before the vote, one protester said on Wednesday that Greeks’ lives “are going to change forever” if the measures were approved. “If you belong to the middle class, that doesn’t exist anymore. There’s only rich and poor.”

Another protester, Anastasia Arvanitiki, 57, a pharmacist, said, “What they’re voting on is exactly the opposite of what they were elected to do.”

“They’ll be the worst criminals in history” if the vote goes through, she said. “We want to see them hanged.”

Mr. Papandreou went into the historic vote with a five-vote parliamentary majority. But the outcome was not certain, as the austerity plan strikes at the heart of his Socialist Party base. The center-right New Democracy opposition party struck a populist tone, , saying the measures offered too much austerity and not enough stimulus.

Last year, Greece’s foreign lenders imposed austerity measures after they provided a first round of aid. Since then, Greece has cut the wages of its 800,000 public workers — a quarter of the work force — by more than 10 percent.

Stephen Castle contributed reporting from Brussels, and David Jolly from Paris.