Athens: Greece's Parliament began debating austerity measures demanded by the European Union and International Monetary Fund as a condition of a 110 billion-euro ($140 billion, Dh514.24 billion) bailout as the nation mourns the three victims of Athens protests against the plan.
Prime Minister George Papandreou, whose socialist Pasok party holds a 10-seat majority in the legislature, will tell lawmakers today that the wage and pension cuts are necessary to secure the package and avoid default.
"No one was happy with the new measures," Pap-andreou told parliament on Wednesday after the deaths, which he called a "brutal murder".
"We have compassion for every family who has seen their plans for the future slip seemingly further away," he said. "But we took these measures to secure a future which might not exist otherwise."
Greece agreed to the package on May 2, pledging 30 billion euros in budget cuts in the next three years to tame the euro- region's second-biggest deficit. Papandreou was forced to seek the aid after soaring borrowing costs left Greece cut off from markets. The measures have fuelled months of protests that culminated in yesterday's general strike. Three employees were killed when a small group of protesters set fire to their bank.
EU summit
Papandreou is pushing to get parliamentary approval before an EU summit in Brussels today on the plan that will help ready the funds for distribution. The country faces 8.5 billion euros in bond redemptions on May 19.
At stake for Greeks is not that their "wages and pensions will be cut", Pasok's George Floridis said in an introductory address to lawmakers yesterday. "It's that they won't be paid starting tomorrow."
Wednesday's violence deepened losses in Greek debt. The yield premium investors demand to buy Greek 10-year bonds over comparable German debt reached 737 basis points yesterday.
The Athens stock exchange, which fell 3.9 per cent Wednesday, added 0.3 per cent yesterday.
Europe is scrambling to activate the aid package to try to stop the fallout from spreading to other high-deficit countries such as Spain and Portugal. Yield premiums on those countries' debt have also jumped and the euro has slid more than 10 per cent this year, to the lowest in more than a year.
Chancellor Angela Merkel appealed to the German Parliament yesterday to approve the nation's share of the loans, saying the stability of the euro was at stake. Germany will pay 22.4 billion euros, almost 30 per cent, of the euro-region funds offered to Greece over three years, and public opposition to the bailout is running high. German lawmakers will vote today on the aid.
The debate in the Greek parliament will be overshadowed by the violence of yesterday's strike. Protesters, who police described as self-styled anarchists, threw firebombs at a branch of Marfin Egnatia Bank SA, killing two women and a man trapped inside the building.
Ta Nea, the most widely-read newspaper, published a photo of one victim crouched on the balcony before smoke overtook her. "The Abyss and Those Responsible," ran the headline. The daily said the woman was pregnant.
Athens police swept through the anarchist stronghold of Exarhia yesterday, arresting 25 and detaining 70, according to a police statement. A total of 41 officers were injured in yesterday's protests, the statement said.
