Protesters pass by a burning cinema in Athens, Sunday, Feb. 12, 2012. Riots engulfed central Athens and at least 10 buildings went up in flames in mass protests late Sunday as lawmakers prepared for a historic parliamentary vote on harsh austerity measures demanded to keep the country solvent and within the eurozone.
ATHENS, GREECE—After a night of high drama, both inside and outside parliament, the Greek government passed the slew of new austerity measures demanded by its official lenders in return for a second bailout package worth 130 billion euros. The deal slashes the minimum wage by 22 percent, reduces pensions, and will result in public-worker rolls shrinking by 150,000 employees, among other measures. The final count for the controversial package, which was announced after 1 a.m. Monday morning, was 199 in favor and 74 against. Politicians accused each other of national betrayal, and tensions erupted into angry exchanges about a deeply divided country on the verge of desperation. Meanwhile, outside parliament, a vast swath of downtown Athens was once again left defenseless against violence, with smashing, burning, and pillaging until the early hours of the morning. Protests also turned ugly in other parts of Greece, from Salonica to Crete.
After a torrential downpour that lasted until lunchtime Sunday, a glorious afternoon sun emerged in Athens on a grim scene. As I made my way to the parliament building, tens of thousands of protesters gathered in front, in Syntagma Square, and in the surrounding streets, and things were already on edge. People held up huge banners with the word “traitors.” They berated the riot police, with some screaming that the officers were defending the very people who were drastically reducing their (police officers’) own pay. Two middle-aged men said that they were there not for themselves but for their children, who face a bleak future of unemployment and wages of starvation and misery.
Inside the parliament, the mood was equally tense. Early in the session, a Communist Party deputy set the tone by hurling the 700-page Greek code of law in the direction of the minister of finance, Evangelos Venizelos. Leftist parliamentarians recognized the demonstrators outside and accused the government of condemning Greek workers and pensioners to poverty and of selling out the country’s sovereignty to Greece’s foreign creditors. As the day wore on and violence erupted in the streets, left-leaning legislators blamed the government for orchestrating the attacks on the police in order to have an excuse for charging and breaking up the demonstration. This argument, long a staple of left-wing argument in Greece and certainly containing elements of truth, was undermined by the fact that the burning and looting of the city center continued long after the protesting masses had gone home.
Adding to the theatrics, and to a sense of history repeating itself, two giants of 20th-century Greek political life, the octogenarians Manolis Glezos and Mikis Theodorakis were brought into the chamber after they suffered breathing difficulties and nearly fainted outside because of police's liberal use of tear gas, the smell of which seeped into parts of the parliament building. Glezos, 89, first gained fame as a teenager when he took down the Nazi flag from the Acropolis during the German Occupation of Greece and has spent his entire life fighting for left-wing causes, for which he was imprisoned and even threatened with execution in an earlier, less-democratic period of Greek history. Theodorakis, 86, the world-famous composer was, among other things, a leading member of the resistance against the military junta of 1967.
Both men strongly oppose the new loan agreement. In Greece’s struggle to get its economy back on its feet and remain in the eurozone, they see a repeat of the German invasion of 1941. Theodorakis went so far as to say yesterday that the new agreement seals the death of Greece and that to vote for it “is treason.” Members of the right-wing LAOS also voiced concerns about national sovereignty, toeing the line put forth by party boss George Karatzaferis, who said that he could not support the new austerity measures even though he still supports Prime Minister Lucas Papademos and his government (whatever that means).
Against all this, and the anger exploding on the street, the prime minister and Venizelos, a forceful public speaker, had a two-pronged strategy: On the one hand, they emphasized the huge cost—that is, a disorderly default—of rejecting the package, even while admitting that it includes “measures that no government would adopt under normal circumstances” (as Papademos put it); on the other, they attempted to allay the overstated fears regarding the new agreement, for example, that by placing Greek bonds under English law, the country’s creditors will have the ability to expropriate the property of the Greek state in the case of a future default.
In the end, the vote passed because of the support of the two main parties, PASOK and Nea Democratia. But many of their deputies, including parliamentary whips and former ministers, could not stomach the measures and voted “no.” In total, George Papandreou, the leader of PASOK, expelled 22 members from his party’s parliamentary group; Antonis Samaras, the head of Nea Democratia, expelled 21 of his own members.
The major question now is whether the new deal, with its wage and pension cuts, its elimination of tax exemptions, which were a great relief to the middle class, its further slashing of public investment and public provision of health-care coverage, can be a way out for Greece. Assuming it is approved on Wednesday by the Eurogroup, it will allow the haircut of Greece’s privately held debt to proceed and lead to the release of funds to recapitalize the country’s banking system, ravaged by the debt haircut and the four-year-long depression of the economy. But can it end the speculation about a euro exit and bring back the confidence needed for private investment to pick up?
“We were falling down a well, and they threw us a rope. But we are not saved,” says Theodore Pelagidis, professor of economic analysis at the University of Piraeus. “We can climb up, or we can slip down.” According to Pelagidis, a lot will depend on the battle within the political system, “which reflects a battle in society at large and which now needs to be resolved,” between those who understand the need for a new development model and a new social contract and those who are still wedded to the old ways.
Going forward, Pelagidis thinks it was crucial that Samaras, widely tipped to win the upcoming election, had voted against the first loan agreement in May 2010. “It was the healthy elements in society that pushed him in this direction,” Pelagidis said. That change in leadership could be a source of hope in a country that has woken up yet again, after another night of parliamentary dramatics, battered and demoralized.