Greek Parliament Backs Austerity as Rioters Burn Buildings

Greece's Finance Minister Evangelos Venizelos
Evangelos Venizelos, Greece's finance minister, said “we must show that Greeks, when they are called on to choose between the bad and the worst, choose the bad to avoid the worst.” Photographer: Jock Fistick/Bloomberg

Feb. 13 (Bloomberg) -- Greek Prime Minister Lucas Papademos won parliamentary approval for austerity measures to secure an international bailout after rioters protesting the measures battled police and set fire to buildings in downtown Athens.

A total of 199 lawmakers voted in favor and 74 against, Parliament Speaker Filippos Petsalnikos said in remarks carried live on state-run Vouli TV early today. When, on Nov. 16, Papademos won a mandate from the Parliament to implement budget measures and secure the bailout of 130 billion euros ($172 billion) he received the support of 255 lawmakers in the 300-strong chamber.

“It is up to us, our vote, whether the country will remain in the euro or be led to a disorderly default,” Papademos told parliament. “Voting for the economic program and opening the road for a loan accord sets the basis for the modernization and recovery of the economy.”

Passage of the austerity bill puts the spotlight on a meeting of euro-region finance ministers on Feb. 15 that must decide whether to approve the second aid package. Resolution of the negotiations, which started in July, would help contain the threat that speculators will target other debt-saddled nations, including Italy and Portugal.

Emergency euro-region talks on Greece broke up on Feb. 9, with Luxembourg Prime Minister Jean-Claude Juncker saying the Greek government must turn budget cuts into law, flesh out 325 million euros in reductions and have major party leaders sign up to the program so they don’t retreat after Greek elections, probably in April.

Euro, Stocks Rise

The euro rose 0.4 percent to 1.3257 at 11:58 a.m. in Athens. The Stoxx Europe 600 Index gained 0.6 percent to 262.90 and Standard & Poor’s 500 Index futures expiring in March rose 0.6 percent today. The MSCI Asia Pacific Index also added 0.6 percent. The Athens Stock Exchange gained 5.2 percent with National Bank of Greece SA, the country’s largest lender, adding 10 percent.

European finance ministers and private creditors this week will decide on a plan to shepherd Greece through a 14.5 billion-euro bond payment bond payment next month. Still, German Finance Minister Wolfgang Schaeuble told German lawmakers on Feb. 10 that Greece was set to miss deficit goals, suggesting that the measures may fall short.

‘Significant Step’

German Foreign Minister Guido Westerwelle lauded Greece’s passage of the austerity measures as a “first significant step in the right direction.”

“Now comes the actual, hard work of implementing the negotiated reforms,” Westerwelle said in an e-mailed statement from Berlin. “That is the decisive condition that will enable Germany and other euro partners to stand by Greece with a further aid package. Working toward implementation is now decisive.”

Police said 45 buildings were set on fire in arson attacks in central Athens last night by anti-austerity protesters including a Starbucks Corp. cafe and a bank. The blazes were near a bank that was set on fire in May 2010, killing three employees during a general strike against Greece’s first bailout package.

Tear Gas

Demonstrators tore up marble in front of parliament that they hurled with fire-bombs at police guarding the chamber. Officers in riot gear responded with tear-gas and flash grenades. Fifty officers were injured in the violence, police spokesman Takis Papapetropoulos said by telephone. The Greek Health Ministry said in an e-mailed statement that 70 people had been taken to local hospitals. Police said 67 rioters were arrested.

“Vandalism, violence and repression have no place in democracy and won’t be tolerated,” Papademos told lawmakers before the vote. “In such critical times we have no luxuries for such conflict.”

The measures equal about 7 percent of gross domestic product over three years and include a debt swap that would shave 100 billion euros off more than 200 billion euros of privately held debt.

Greece was granted its first aid package of 110 billion euros in May 2010.

To contact the reporters on this story: Maria Petrakis in Athens at; Tom Stoukas in Athens at; Paul Tugwell in Athens at

To contact the editor responsible for this story: James Hertling at