Daily Israel Report

Greek Parliament Passes Austerity Budget

Greek Prime Minister George Papandreou soldiers on with the austerity plan despite massive popular discontent.
By Amiel Ungar
First Publish: 12/23/2010, 5:13 PM / Last Update: 12/23/2010, 8:41 PM

 

PASOK, the Socialist party of Greece, managed early this morning to approve an austerity budget effectively cutting government expenditures by 27.1%. This was the bitter medicine to be administered in a European Union International Monetary Fund (IMF)bailout plan for Greece.

Prior to the budget vote, the IMF passed on €2.5 billion in loans to Greece as part of the third installment of the financial rescue package as a vote of confidence. Yet PASOK found itself alone as the opposition composed of the extreme right, conservatives, Communists and radical left voted against and the motion carried by 156 to 142.

Primary features of the budget are an increase in the sales tax, lower defense spending and a freeze on pensions. Greek Prime Minister George Papandreou told parliament that the measures were necessary to avoid bankruptcy and in a televised speech to the nation he defended the terms imposed by the European Union as necessary to prevent financial collapse.

Greek unions who constitute the backbone of PASOK were furious and staged a wave of general strikes although they slightly reduced the intensity of the actions, particularly in the transportation sector, as the holiday season approached. Before the strike actions softened, the government was actually considering issuing mobilization orders to the strikers to force them back to work. The streets of Athens were strewn with garbage following a sanitation workers strike.

Even more ominous than the strikes were acts of violence in which one former conservative minister Costis Hatzidakis was assaulted and bloodied.  Writing in the conservative newspaper Ekatherimini, columnist Alexis Papachelas accused some of his media colleagues of playing with fire:  "Some commentators protested after a youth was arrested for throwing a Molotov cocktail at police. Others questioned whether the assault on Hatzidakis was justified."  Papachelas also accused certain elites of stoking the violence with their demagogic statements. "when our very conservative politicians condemn the alleged return of labor rights to the Dark Ages, when the Church protests about the nation being under the occupation of the European Union and the International Monetary Fund and when the Communist Party sees the threat of all-out war".  

Perhaps one can also interpret the vicious anti-Semitic remarks of the Greek Orthodox Metropolite of Piraeus, Seraphim, in this context of searching for scapegoats.  Seraphim sought to bthlame the Jews for Greece's economic travails. The Greek Orthodox Church has not remotely emulated the attempts of the Western churches to eradicate the anti-Semitism within church doctrine.

It therefore all boils down to the question of whether Papandreou can keep his party behind him. Understandably members of his parliamentary faction are finding it difficult to vote against their own constituencies, let alone cope with the turbulent political atmosphere. To make it somewhat easier, the government postponed the liberalization bill that would make professions such as lawyers, dentists, dentists, pharmacists, accountants etc. easier to get into. Other professions would be made more competitive by a prohibition on applying minimum fees. This is one of the conditions imposed by the EU and the IMF to galvanize the Greek economy.

Another problem confronting the Papandreou government was that even those who loyally voted for the budget are skeptical that the austerity budget can work. Ektoras Nasiokas of PASOK complained:“The numbers do not add up as the country is in deep recession and there are no policies to confront this situation,” If Papandreou cannot convince his own party that the bitter medicine is working, he will find himself in serious trouble.