Greece says it will hold a national election in April to replace the caretaker government of Prime Minister Lucas Papademos. The announcement was made a day after rioters torched the center of Athens and parliament adopted a new round of controversial austerity measures.
European leaders cautiously applauded the Greek legislative action to cut the country’s minimum wage by 22 percent, eliminate a fifth of government jobs and curtail spending. But they warned that leaders of Greece’s fractious political parties must still sign a written agreement to impose the budget restraints before a Wednesday meeting of the finance chiefs from the 17 countries that use the euro.
Greece’s European neighbors say they want the written assurance to show that a newly elected government would not retreat on the reforms. Nearly 200 deputies in the 300-seat parliament approved of the cost-cutting, but 43 members of the ruling coalition voted against it and on Monday were expelled from the socialist and conservative parties.
German economic minister Philipp Roesler said the Greek vote was “one step in the right direction.” But he said Greece’s European neighbors, many of them weary of the pace of Greek reforms and the country’s unkept promises, are waiting to see “what comes after the legislation.”
European economic minister Olli Rehn said the European Union supports Greece but that it must fully embrace its economic changes.
The other eurozone nations had told Greece they will not approve a new international $172 billion bailout, the country’s second in two years, unless it sanctioned the new austerity measures on top of ones enacted earlier. The debt-ridden Athens government is also negotiating with large private financial institutions to cut in half the amount the country owes them – a $132-billion reduction.
Greece says that without the new funding, it will default on $19 billion in financial obligations it owes next month. Rehn said a default would be worse for Greece – and Europe – than for Greeks living with the austerity measures.
((optional Rehn sound, in English: “A disorderly default of Greece would be a much worse outcome with devastating consequences for the Greek society, especially for the weaker members of the Greek society. It would of course also have very negative ramifications through the contagion effect and chain reactions to the whole of European economy.”
But the Greek populace has voiced increasing anger at the government’s austerity push, with thousands of demonstrators taking to the streets in Athens in violent protests ahead of parliament’s vote. At least 45 buildings were torched in the Athens rioting, including one of the capital’s oldest cinemas. The anti-government protesters smashed and looted dozens of stores and cafes.
Police fired volleys of tear gas at the demonstrators, and the stench of the tear gas hung in the air Monday.
Authorities said more than 100 police and at least 70 protesters needed medical care or were hospitalized. More than 160 protesters were arrested or detained.