Despite all of the ruckus still coming from the communists/anarchists/public employees, the Greek Parliament (in which the Socialist party holds the majority) has effectively passed the five-year austerity measures needed to secure aid from international creditors and prevent a national default:
Passage of the additional €28.4 billion ($40.81 billion) in spending cuts and new taxes was set as a condition for another international bailout to keep Greece from defaulting on its debt.
The outcome is a relief for Prime Minister George Papandreou, who has been working hard to ensure that wavering deputies from his own party voted with their party. "We have to do anything necessary to avoid the country collapsing," Mr. Papandreou said just before the voting on Wednesday.
He said that failure to approve the measures would cause the country to run out of money. He also warned there was "no plan B" if the measures did not pass and that Greece would be "sold off" by its international creditors.
Greece faces another critical test Thursday, when parliament is set to hold an article-by-article vote on the legislation implementing the austerity plan and a promised €50 billion privatization program. But with the overall outlines of the austerity plan having passed, the vote on the implementing legislation is expected to be a formality.
Earlier on Wednesday clashes broke out between dozens of anarchists and police in front of Parliament. Eyewitnesses said demonstrators smashed marble paving stones in Athens's central square and threw rocks at police, wo responded with tear gas and cleared the area.
The violence dispersed an otherwise peaceful demonstration of about 10,000 people that had gathered for a second day to march against the austerity plan. Many Greeks believe the austerity plan will lead to further job losses and bigger financial burdens on households.
Greece's two major umbrella unions—which declared a 48-hour general strike Tuesday—also staged protests on Wednesday.
The austerity package includes plans to lay off large numbers of the low-productivity, high-salary public employees (who, until now, have enjoyed a virtual constitutional guarantee that they cannot be fired) and opening up certain sectors of the economy to privatization (i.e., the government-run healthcare, transportation, and energy sectors). And while this is a positive step in preventing the looters/moochers from completely driving the country into the ground and in improving long-term competitiveness, Greece will have to enact further measures that favor major economic growth before the country will be even remotely able to take care of itself.
Hmm, now that's funny... as our own economy wends its way toward a similarly looming debt crisis, Democrats are still proposing to enhance government control over the exact economic sectors from which Greece finds itself forced to back away. Imagine that.