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Socialist votes against Greek austerity article

Socialist votes against Greek austerity article
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Thursday, October 20, 2011 - 1:28pm

ATHENS, Greece (AP) -- A prominent lawmaker in Greece's governing Socialist party has voted against a key article in an austerity bill, dealing a potential blow to the government.

Former Labor Minister Louka Katseli on Thursday voted against the contentious Article 37, which scales back collective labor bargaining rights. She voted in favor of the overall bill.

The governing Socialists have a majority of four seats in the 300-member parliament, and the bill is likely to pass. But the dissent undermines cohesion in Prime Minister George Papandreou's Socialist party.

The new austerity measures have sparked fury among Greek workers, with demonstrations during two days of a general strike degenerating into violence. One person died after Thursday's protest and 74 were injured.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

ATHENS, Greece (AP) - Clouds of tear gas choked central Athens as rival demonstrators fought with stones and firebombs outside parliament Thursday, leaving one man dead and dozens injured. Inside, the Socialist government grappled with dissent over the deeply unpopular new cutbacks demanded by creditors to keep the country afloat.

Greece has been kept solvent only by international bailout loans from the International Monetary Fund and other eurozone nations since May of last year. Creditors have demanded that Greece pass the extra austerity measures before they give the country more funds from that euro110 billion ($152 billion) bailout loan. Greece says it will run out of money in mid-November without the next euro8 billion ($11 billion) installment.

On the second day of a general strike that has paralyzed the country, demonstrators marched to Syntagma Square before parliament to protest the new measures that include pay and staff cuts in the civil service as well as pension cuts and tax hikes for all Greeks. The draft law calls for 30,000 public servants to be put on reduced pay and for collective bargaining rights to be suspended.

State hospital officials said a 53-year-old man died of heart failure and at least 74 people were injured after hundreds of rioting youths attacked some of the 50,000 peaceful demonstrators with firebombs and stones. Some of the injured were covered in blood from head wounds.

Police said at least six people were arrested and another 24 detained. Six officers were injured.

The clashes spread across the city, even reaching outside the city's new Acropolis Museum.

Youths set mounds of trash on fire in Syntagma Square and across the city. Young men in crash helmets and gas masks used crowbars and clubs to smash marble from building facades and rip up paving stones to throw at riot police.

Parliament approved the new round of austerity cuts in principle late Wednesday and was to vote on individual articles late Thursday. The Socialists have a four-seat majority in parliament.

In a potential blow to the government, former Socialist Labor Minister Louka Katseli said she would not back a key provision to scale back labor bargaining rights.

Finance Minister Evangelos Venizelos issued an impassioned appeal to Socialist and opposition lawmakers alike, warning that failure to approve the measures would be disastrous.

"If the law is not approved ...there is no need for me even to go to the eurogroup meeting on Friday, or the prime minister to Sunday's summit," he said Thursday. "The country will be exposed to the danger of a non-rational development, and will once again serve as the scapegoat on which Europe's historic, political and institutional shortcomings will be dumped."

Prime Minister George Papandreou called on Greece's eurozone partners to urgently end a deadlock in negotiations over a broader European debt deal.

"Europe is now at risk because of its inability to grasp the scale of the crisis in time - the systemic problems - and take the necessary decisions," he said during an acrimonious debate in parliament. "Europe must now assume its responsibilities - all of us in Europe. A small fire has become a pan-European fire."

In July, eurozone leaders tentatively agreed in a second euro109 billion ($150 billion) bailout, that would also see banks and other private bondholders give Greece easier terms on its debt.

But Greece's international creditors, meanwhile, warned that the second rescue package may not be enough to save the country from bankruptcy, according to a draft of a debt inspectors' report obtained Thursday by The Associated Press in Berlin.

The inspectors said Greece has missed its deficit-cutting targets and called the pace of its reforms insufficient, but still said Athens should get euro8 billion ($11 billion) in bailout loans as soon as possible so it does not default next month.

There's growing market unease about whether a summit of eurozone leaders this Sunday in Brussels will yield a comprehensive solution to the continent's debt crisis. Finance ministers from the 17 countries that use the euro will meet Friday ahead of the summit.

Unions seemed resigned to the law being passed, but warned that the whole country opposed it.

"Our European friends must know that our prime minister will go to the European summit naked, because the promises he will make have no backing in his country," said Ilias Iliopoulos, secretary general of the Adedy civil servants' union.

The general strike Thursday disrupted public transport, public services and left ships docked at ports. Schools and customs offices closed and state hospitals were running on emergency staff.

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