Austerity vote splits Syriza
July 16, 2015
As thousands protested, parliament passed new austerity-for-credit measures with 229 votes in the 300-seat chamber. Sixty-four lawmakers opposed the cuts on the table and six abstained.
Prime Minister Alexis Tsipras (right in photo) had to count on opposition parties in order to pass the measures, leaving his coalition in question. Tsipras had made his about-face on austerity following grueling all-night negotiations in Brussels on Monday, giving in to lenders' demands for immediate reforms to keep the euro as Greece's currency.
"I acknowledge the fiscal measures are harsh, that they won't benefit the Greek economy - but I'm forced to accept them," Tsipras said early Thursday, making his final appeal for support.
In exchange for up to 86 billion euros ($94 billion), Greece accepted pension cuts, a higher value-added tax - a regressive levy that disproportionately affects the poor - an overhaul of collective bargaining and public-spending limits. Lawmakers agreed to sequester 50 billion euros from selling off public assets in a fund to act as collateral, effectively opening institutions to private bidders. The economy has shrunk by a quarter in the course of two previous credit packages and 25 percent of the population are unemployed.
Parliament speaker Zoe Konstantopoulou (left in photo) called the measures "social genocide."
Varoufakis unbound
The 38 lawmakers who stayed true to Syriza's pledge of no new cuts included former Finance Minister Yanis Varoufakis, who stepped down last week in hopes of improving relations with international creditors after 60 percent of voters had rejected new austerity in a referendum. As finance minister, he had frequently butted heads with Germany's Wolfgang Schäuble and other eurozone finance ministers who would not relent on the austerity-and-privatizations program they had set out for Greece. Stepping down from his post has allowed Varoufakis, no shrinking violet, to speak even more freely than he had.
In an article posted ahead of Wednesday's vote, the German news magazine "Die Zeit" quoted Varoufakis as saying that it had always been Schäuble's plan to "let Greece fall."
Energy Minister Panagiotis Lafazanis and Deputy Labor Minister Dimitris Stratoulis voted against the package. Deputy Finance Minister Nadia Valavani stepped down.
Greece's economy has nearly slowed to a halt over the past two weeks while banks were forced to close, which has disrupted the country's trade with Germany.
mkg/gsw (Reuters, AFP)