ATHENS, Greece (AP) — Greece’s Parliament in a narrow vote has approved a bill reforming the debt-ridden country’s pension and tax systems.
The bill, introduced as part of the requirements the country must meet under its third international bailout, is set to increase social security and pension contributions, and raise taxes for most people.
The bill was approved by the 153 lawmakers of the ruling Syriza/Independent Greeks government coalition in an early Monday vote. All opposition parties in the 300-member Parliament voted against it.
Protesters chant slogans during an anti-austerity rally in front of the parliament in Athens, Sunday, May 8, 2016. (AP Photo/Yorgos Karahalis)
The vote took place amid a crippling general strike and protests that briefly turned violent Sunday.
The government now expects that its creditors, which include the European Commission, the European Central Bank, the European Stability Mechanism and the International Monetary Fund, will move to lighten its debt burden, and that this will dominate the agenda of a meeting of the EU finance ministers in Monday’s Eurogroup.
But the creditors themselves, with the notable exception of the IMF, are against forgiving part of Greece’s massive debt. At most, they appear willing to discuss cutting the higher interest rates that will prevail after 2022 and lengthening the repayment period.
All of the creditors have put pressure on Greece for further austerity measures costing billions of dollars, including ones that would kick in automatically should Greece fail to achieve agreed levels of a primary budget surplus in 2018.
For the government, which had hoped to divide the creditors to achieve more favorable terms and be excused from further austerity measures, the latest vote will not be the last.
Already, a new bill is being prepared, calling for higher taxes on a range of products, from tobacco to beer to broadband Internet connections. This bill is expected to pass later in the month.
Talks on further reforms as part of the country’s third bailout have been dragging on for more than six months, delaying payouts of vital bailout loans.
The opposition unanimously blasted the added taxes and the government’s record in failing to revive the economy, now in its eighth year of recession and its seventh under creditor-mandated austerity.
Prime Minister Alexis Tsipras and his ministers defended their plans, saying things were worse when the opposition was ruling the country, and that taxes were better than spending cuts, and that they were trying to root out corruption and entanglements with powerful business interests.
“You say you want spending cuts, but you don’t dare name them,” Tsipras told the opposition.
Tsipras and Labor Minister George Katrougalos, who introduced the bill, said that social security contributions would decline for many self-employed professionals, with Katrougalos adding the bill’s provisions showed the way forward for social policy in a Europe dominated by pro-market “neoliberals.”
The bill was condemned by all major unions and professional associations. The latter, including engineers and doctors, warned that lawmakers who are also members of those associations will face disciplinary action and possible expulsion if they voted for the bill. Tsipras is a member of an engineers’ association.
A peaceful protest rally outside Parliament, in which over 10,000 people, mostly pro-communist unionists, attended, was disrupted Sunday evening by a handful of anarchists.
The anarchists attacked riot police with firebombs and other projectiles. The police responded with stun grenades and blasts of tear gas that drove away everyone assembled outside Parliament.
Police detained nine people in connection with the clashes.
In the northern city of Thessaloniki, Greece’s second largest, anarchists hurled firebombs at police guarding the local offices of the ruling Syriza party. Police used tear gas and chased the rioters through the streets in central Thessaloniki but made no arrests.
Theodora Tongas, in Athens, and Costas Kantouris, in Thessaloniki, contributed to this report.
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