Greek government gets key backing to pass reforms

ATHENS Tue Oct 30, 2012 5:42pm EDT

1 of 3. Banking sector employees march in front of the parliament during a rally against planned reforms at their pension fund in central Athens October 30, 2012. A Greek coalition partner confirmed on Tuesday it would vote against labour reforms proposed by foreign lenders, ignoring the prime minister's appeal for a united front to push through more unpopular austerity.

Credit: Reuters/John Kolesidis

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ATHENS (Reuters) - An overwhelming majority of Greek Socialist lawmakers have agreed to vote in favor of contested austerity reforms, party officials told Reuters on Tuesday, sharply increasing the odds of securing parliamentary approval for the measures.

Near-bankrupt Greece needs to push through spending cuts and tax measures worth 13.5 billion euros as well as a raft of reforms to appease EU and IMF lenders and secure bailout money needed to avoid running out of cash next month.

After months of negotiations on the austerity plan, Prime Minister Antonis Samaras announced on Tuesday that talks had been completed and implored his allies to back the package.

The prime minister's New Democracy party and the Socialist PASOK have between them 160 deputies, nine more than they need for an absolute majority in parliament.

But the third party in the coalition, Democratic Left, refuses to back the proposed new labor laws which could tempt other deputies to defect and leave the government facing an unpredictable vote in parliament next week.

However, the odds of parliamentary approval jumped after Socialist PASOK deputies agreed to back the reforms.

"The overwhelming majority of PASOK lawmakers are in favor of the package," one of the party officials said, adding that just two of the 33 PASOK lawmakers would vote against the package, while another two had yet to decide.

Still, a flurry of contradictory statements from the three coalition parties highlighted the chaos ahead of the crucial vote on austerity measures, which has become the government's biggest test since taking power in June.

"What would happen if the deal isn't passed and the country is led to chaos?" Samaras said in a statement.

"Such dangers must be avoided. That is the responsibility of each party and every lawmaker individually."

The Democratic Left party immediately responded by reiterating it would vote against labor reforms.

"The Democratic Left has fought on the issue of labor relations, to protect workers' rights which have been already weakened," the party said in statement.

"It does not agree with the result of the negotiations. The Democratic Left sticks to its position."

PASOK, which has seen its support evaporate in the face of continued austerity, then interrupted a party meeting to put out a statement chiding Samaras for saying talks had concluded.

"A rushed press release that says 'the government did what it could, it is moving ahead and whoever wants to should follow it' ... is at best unfortunate," the party's chief said in the statement.

NUMBERS GAME

The government is expected to include a large chunk of the austerity measures in the 2013 budget bill to be presented on Wednesday, with the remaining measures and labor reforms in a separate bill to be put to parliament on Monday.

The bickering among the allies threatens to bring next week's vote down to a numbers game, undermining Samaras's pledge that Greece's government is committed to doing everything it can to restore credibility in the eyes of European partners.

The Democratic Left party has the support of 16 deputies in the 300-seat parliament, meaning the government - which has a 176-seat majority - could pass the reforms without its support as long as PASOK deputies vote in favor.

But the smaller party's stance has emboldened some in PASOK and speculation has grown that some rebel lawmakers could vote against the measures. The austerity bill could be defeated if more than 10 of the 33 PASOK lawmakers oppose them.

The government also faces a contentious vote on a privatizations bill on Wednesday which could set the tone for the bigger vote next week.

The proposed law intends to scrap the government's obligation to own a minimum stake in a string of former state companies, but PASOK and Democratic Left deputies have demanded all privatizations be subject to parliamentary approval.

A Democratic Left official said the party would abstain on the entire privatization bill and vote against certain articles.

Euro zone finance ministers are due to hold a conference call on Greece on Wednesday, ahead of a November 12 meeting that is expected to focus on the debt-laden nation's latest crisis.

Highlighting Greece's troubles to meet its bailout targets, the country's privatization agency said on Tuesday it has slashed its revenue target to about 11 billion euros by the end of 2016, down from a previous target of about 19 billion euros by the end of 2015.

Greece has already missed several privatization revenue targets and has raised only about 1.6 billion euros in cash since its first bailout in May 2010.

The lack of progress stems from the reluctance of Greek governments to sell off assets, political instability and the lack of investor interest in a country facing a grim economic future and the threat of an exit from the euro.

(Writing by Deepa Babington; Editing by Jon Hemming)

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Comments (3)
The Greek government is throwing its citizenry under the bus to please the big banks that want to keep the euro no matter what. Of course, Germany will huff and puff and extend Greece’s grace period, for the exact same reason. They are now sucking in the big US funds and banks, so that when the euro implodes a few years hence, it will wipe out the US economy along with all of those of the eurozone countries–unless, of course, the governments of all those countries agree to turn themselves into powerless subdivisions within a nation-state of Europe run by a dictatorship.

Oct 30, 2012 8:00pm EDT  --  Report as abuse
ALALAYIIIAAAA wrote:
my quote since the begining of the crisis is that: get out of euro and seek cash eastern.
russia buys greek assets with 30% discount and us-uk-germany with 50% or for free if its possible like the shipyards bought by germany for 1 euro(!!!!!) in coupled with severe austerity measures.
the greek fall prey of the international propaganda presenting them as lazybones and trying to follow whatever the western funds command.on the other hand china seems not interested and russia is not welcomed from the greek harvard educated boys.sooner or later i think that romania-serbia-bulgaria-greece-cuprus will be russian friendly countries and they will see prosperity.

Oct 31, 2012 3:10am EDT  --  Report as abuse
dareconomics wrote:
The media needs to sell newspapers, or whatever it is they offer nowadays. As such, they add a certain amount of drama to any news article. The bottom line is that the troika’s demands will be fulfilled in the coming few days, and Greece will avoid disaster for now.

These are the important facts. Samaras’ conservative party and PASOK, the socialists, control 160 votes in a 300 seat parliament. PASOK has indicated that it supports the austerity package with its 33 deputies. Eleven deputies would need to defect for the bill to be voted down.

This is very unlikely. PASOK is part of the status quo in Greece and plays Democrats to the New Democracy’s Republicans. Their constituents are the government workers still getting paychecks, and they need to keep the money flowing.

There is very little for them to gain by defecting from the coalition. When the Socialists took power, they admitted to the budget shenanigans perpetrated by New Democracy, and this precipitated the eurocrisis. The Greek voters shot the messenger.

At the very least, Greece needs to elect a new government. The current administration is intent on bowing to the troika, and as such has no leverage in negotiations. Syriza is crazy enough to extract concessions.

As it stands now, the plan in place is just leading to a deeper depression. Europe is paying just enough to maintain the status quo in Greece to avert a market panic, while the Greek people suffer. This will come to a head soon. Let’s hope that the denouement is peaceful.

dareconomics.wordpress.com

Oct 31, 2012 12:09pm EDT  --  Report as abuse
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