Greece Passes Austerity Plan; Country Explodes in Rage

The long-running saga that is the Greek financial crisis has a new chapter. In a landmark vote, the Parliament voted shortly after midnight Monday to accept a stringent financial austerity package, which will look to drastically cut down on expenditure related through drastic pay, pension and job cuts in the public sector; the targeted savings figure for the government is $4.3 billion. The primary aim of the package is to ensure the county remains monetarily afloat, for a bit longer.

According to a Reuters report, 199 of 300 voting lawmakers agreed to pass the bill. There was, however, some additional drama, when 43 deputies from two parties (Socialites and Conservatives) constituting Prime Minister Lucas Papademos' government vociferously voted against the package. They were immediately expelled from their parties.

News of the package being passed resulted in widespread rioting across the country. A Guardian report indicated that as many as 40 buildings were torched and several people injured. There were also street fights between protesters and riot police. The protestors were campaigning against fur-ther job cuts and wage reductions, arguing "these measures will never pass. They are a breach of our democracy".

Despite the best efforts of those protesting, the passing of the austerity package means Greece will get a second bailout package in less than two years. The package will be worth $170 billion and there will also be a $130 billion write-off of debt. The loss of the bail package would have meant Greece would have defaulted on next month's loan repayment of $19 million. The Greek crisis began on May 2, 2010, when former Prime Minister George Papandreou indicated he had reached an agreement with the European Union and the International Monetary Fund for a bailout pack-age in return for budget cuts of $43 billion over three years. The package was the first time a Eurozone member country had to be so helped and began the call for austerity measures. The Greek population was immediately unhappy and began nationwide strikes.

Greece continued to announce more austerity measures, it raised the retirement age of women to 65, to match that for men, on July 7, 2010. In May and June of 2011 the country announced a series of privatisations looking to raise $70 billion by 2015. However, despite those measures, on Oct. 2 draft government figures suggested the country would miss deficit target. A Reuters report indicated the 2012 draft budget predicted a deficit growth of 8.5 percent of GDP for 2011. On Dec. 13, the Greek Finance Ministry said the country's public deficit widens by 5.1 percent in the first 11 months of 2011. A day later, the IMF said reforms in the country were being hampered by too many delays in implementing required measures. Meanwhile, a BBC report said the Eurozone was looking for a further $430 million in savings, from Greece, for the year and insisted leaders provide "strong political assurances" on implementation of packages. The country's creditors, led by a suspicious Germany, said "Greece's promises are no longer enough for us" and even brought up the subject of Greece leaving the Eurozone.

Currently, then, the EU has agreed to the bailout. The money (or at least most of it) will be held in a separate account, will hold approximately 70 percent of the funds and will be used to only to service debt.