Greek MPs have voted in favor of new austerity measures, including pension cuts, tax hikes, and new taxes on internet and TV. Clashes with police broke out as thousands in Athens protested the moves that Greece’s creditors have been demanding.
Late on Sunday night, the Greek Parliament adopted controversial pension reforms set to reduce pension allowances and raise taxes, among other measures, in order to comply with EU bail-out requirements, as anti-austerity protests continued to rock Athens.
According to the Greek Reporter news site, 153 out of 300 Greek Parliament deputies voted in favor of the bill. The legislation presupposes comprehensive cuts in funding to Greece’s social security system estimated at €5.4 billion. In addition, citizens will be subject to a range of new taxes, such those on coffee and electronic cigarettes. The VAT on fuel will increase by a staggering 24 percent.
Greek citizens will already be feeling the burden of the newly-adopted fiscal measures this summer, as the five percent tax on broadband internet and ten percent on paid television are scheduled to kick in in July. Starting from January of next year, the consumption tax on coffee and electronic cigarettes will be enforced, along with a tax on tourists staying in hotels from 2 stars and up.
Although the pending measures may be highly unpopular at home, the EU commended the controversial package as a constructive step towards Greece securing its third bail-out.
“We are now at the time of the first review of the program (to aid Greece) and the objectives have been basically achieved,” European Commission president Jean-Claude Juncker told Funke Mediengruppe on Sunday.
Thousands of people had earlier gathered in front of the Greek parliament in Athens ahead of the Sunday night vote. At some point, the rally took a violent turn when protesters, supposedly from an anarchist group, started throwing flares, Molotov cocktails, stones, and other objects at the parliament building and police officers. The police responded with tear gas and flashbangs.
The protest was held during a three-day general strike against pension cuts and the introduction of new taxes that shut down media outlets, public transport, and ferry service.
Security measures and police presence in the city have been increased over recent days out of fear of public disorder, especially at the prime minister’s residence and parliament.
The reform will reduce Greece’s pension payouts, merge pension funds, and raise taxes for medium and high income individuals.
The Greek Parliament’s decision came just ahead of an emergency meeting of Eurozone finance ministers, who are set to review the country’s progress in implementing the reforms and discuss the possibility of new debt relief for Greece.
Earlier, IMF chief Christine Lagarde said in a letter to the finance ministers that was obtained by Financial Times last week, that restricting debt will be one of the conditions for Greece if it is to enter into a new program with the body.
“We believe that specific measures, debt restructuring, and financing must now be discussed simultaneously,” the letter read.
Speaking to lawmakers on Friday, Greek Prime Minister Alexis Tsipras defended the changes, saying that they won’t affect the poorest.
In an interview with RT, Harry Violaris from the WAKEUP Cyprus movement described the agreement between Greece and the EU as “non-viable,” and didn’t exclude the possibility that debt relief for Greece could be introduced at a meeting of Eurozone finance ministers on Monday.
There are some disagreements between Paris and Berlin as to whether to provide Greece with debt relief or not. France, supported by Portugal, believes there must be some sort of debt relief for Greece, since the current demands are too harsh and won’t allow the country get back on its feet. Germany, along with Austria and Finland, insists that there is no need for such measures. Meanwhile, German Vice Chancellor Sigmar Gabriel is calling for debt reduction.
“I believe there are chances for consensus, although Germany is in a difficult political position in terms of similar [situations] in Portugal, Spain, and Cyprus. Therefore there’s difficulty in accepting of… reduction of Greek debt,” Violaris said.
The reforms are part of a package deal agreed upon with the EU and IMF last July. It is the third bailout for Greece, which has been burdened with debts since 2010.