* Greek parliament passes unpopular package of cuts
* Papademos accepts implementation will be tough
* Violence erupts, petrol bombs create wall of fire
* World markets gain modestly
By Harry Papachristou and Yannis Behrakis
ATHENS, Feb 13 Greece's parliament
approved a deeply unpopular austerity bill on Monday to secure a
second EU/IMF bailout and avoid national bankruptcy, as
buildings burned across central Athens and violence spread
around the country.
Cinemas, cafes, shops and banks were set ablaze in central
Athens and black-masked protesters fought riot police outside
parliament before lawmakers voted on the package that demands
deep pay, pension and job cuts -- the price of a 130 billion
euro ($172 billion) bailout needed to keep the country afloat.
State television reported the violence spread to the tourist
islands of Corfu and Crete, the northern city of Thessaloniki
and towns in central Greece. Police said 150 shops were looted
in the capital and 34 buildings set ablaze.
Altogether 199 of the 300 lawmakers backed the bill, but 43
deputies from the two parties in the government of Prime
Minister Lucas Papademos, the socialists and conservatives,
rebelled by voting against It. They were immediately expelled by
Asian shares and the euro gained modestly on Monday,
relieved by the Greek parliament's passage of austerity measures
that put the country a step closer to securing a much-needed
bailout fund and avoiding a messy default.
MSCI's broadest index of Asia Pacific shares outside Japan
edged up as much as 0.3 percent on the news.
The rebellion and street violence foreshadowed the problems
the Greek government faces in implementing the cuts, which
include a 22 percent reduction in the minimum wage -- a package
critics say condemns the economy to an ever-deeper downward
Papademos, a technocrat brought in to get a grip on the
crisis, denounced the worst breakdown of order since 2008, when
violence gripped Greece for weeks after police shot a
"Vandalism, violence and destruction have no place in a
democratic country and won't be tolerated," he told parliament
as it prepared to vote.
But he admitted that imposing the austerity on a nation that
has already endured several years of cuts would be tough.
"The full, timely and effective implementation of the
programme won't be easy. We are fully aware that the economic
programme means short-term sacrifices for the Greek people,"
Greece needs the international funds before March 20 to meet
debt repayments of 14.5 billion euros, or suffer a chaotic
default which could shake the entire euro zone.
Outside parliament chaos reigned. A Reuters photographer saw
buildings in Athens engulfed in flames and huge plumes of smoke
rose in the night sky.
"We are facing destruction. Our country, our home, has
become ripe for burning, the centre of Athens is in flames. We
cannot allow populism to burn our country down," conservative
lawmaker Costis Hatzidakis told parliament.
The air in Syntagma Square outside parliament was thick with
teargas as riot police fought running battles with youths who
smashed marble balustrades and hurled stones and petrol bombs.
Terrified Greeks and tourists fled the rock-strewn streets
and the clouds of stinging gas, cramming into hotel lobbies for
shelter as lines of riot police struggled to contain the mayhem.
State NET television reported that trouble had also broken
out in Heraklion, capital of Crete, as well as the towns of
Volos and Agrinio in central Greece.
On the streets of Athens many businesses were ablaze,
including the neo-classical home to the Attikon cinema dating
from 1870 and a building housing the Asty, an underground cinema
used by the Gestapo as a torture chamber during World War Two.
NO GOOD CHOICES
The EU and IMF say they have had enough of broken promises
and that the funds will be released only with the clear
commitment of Greek political leaders that they will implement
the reforms whoever wins an election potentially in April.
Euro zone paymaster Germany ratcheted up the pressure on
Sunday. "The promises from Greece aren't enough for us any
more," German Finance Minister Wolfgang Schaeuble said in an
interview published in Welt am Sonntag newspaper.
"Greece needs to do its own homework to become competitive,
whether that happens in conjunction with a new rescue programme
or by another route that we actually don't want to take."
When asked if that other route meant Greece quitting the
euro zone, Schaeuble said: "That is all in the hands of the
Greeks themselves. But even in the event (Greece leaves the euro
zone), which almost no one assumes will happen, they will still
remain part of Europe."
The bill sets out 3.3 billion euros ($4.35 billion) of extra
budget cuts for this year alone.
It also provides for a bond swap to ease Greece's debt
burden by cutting the real value of private-sector investors'
bond holdings by some 70 percent. Greece would have missed a
Feb. 17 deadline to offer a debt "haircut" to private
bondholders if the vote had not been passed.
Many Greeks believe their living standards are collapsing
already and the new measures will deepen their misery.
"Enough is enough!" said 89-year-old Manolis Glezos, one of
Greece's most famous leftists and a national hero. "They have no
idea what an uprising by the Greek people means. And the Greek
people, regardless of ideology, have risen."
Glezos is a national hero for sneaking up the Acropolis at
night in 1941 and tearing down a Nazi flag from under the noses
of the German occupiers, raising the morale of Athens residents.