Greece faces a financial D-Day Wednesday as lawmakers vote on a tough austerity plan to secure new money from creditors to avoid sovereign default despite a last-ditch general strike by protestors.
The parliament, where Prime Minister George Papandreou’s Socialists have a five-seat majority, will stage the first of two votes on a 28.4-billion-euro ($40 billion) package of tax rises, spending cuts and state sell-offs through to the end of 2015.
The vote, eagerly awaited by other debt-ridden eurozone countries fearing dangerous knock-on effects on markets, will likely not begin until mid-afternoon.
The new measures were drawn up to meet European Union andInternational Monetary Fund conditions for further bailout support, after a 110-billion-euro rescue last year.
If passed, these creditors could authorise as early as Sunday 12 billion in blocked funds needed to stave off bankruptcy for the Athens government when massive repayments fall due in mid-July.
They would then thrash out the other sticking points holding up a second bailout — how much banks and other private creditors will contribute by way of a ‘rollover’ of existing debts, and the amount Greece also has to come up with through privatising national utility and land holdings.
On Tuesday, police fired tear gas on violent protestors on the first day of a 48-hour general strike against the belt-tightening package.
Police said 21 officers were hurt but made only about a dozen arrests despite firebombs setting property ablaze and demonstrators smashing up the marble steps of a luxury hotel facing the legislature to use as missiles.
More demonstrations are planned on Wednesday, with another blanket power cut likely as unions try to block one of the most sensitive elements in Papandreou’s plans, the disposal of shares in the national electricity company.
At least one of Papandreou’s own lawmakers has threatened to vote against the whip by way of opposition to this decision.
While Tuesday’s protests drew nearly 10,000 onto the parliament’sSyntagma Square home, the numbers were fewer than on previous occasions where ritual firebombing unleashed tear-gassing by security forces by way of reply.
A 4,000-strong police contingent will again barricade a wide perimeter running right round the parliament, but self-styled Indignants who have set up camp on the square for nearly seven weeks now have vowed to go head-to-head with this ring of steel in the morning.