Greek cabinet approves cuts

The leader of Greece’s main conservative party has called on party members to back the country’s latest austerity measures, saying Saturday it was "an issue of party discipline. "

Antonis Samaras, leader of Greece’s New Democracy party, told party members to support the emergency legislation in a parliamentary vote on Sunday, adding that anyone who opposed the bailout "will not be a candidate in the next election." The New Democracy party, which backs the coalition of Prime Minister Lucas Papademos, is the second biggest in parliament.

However, Samaras also said his party would ask for parliament to be dissolved once the debt-swapping deal with Greece’s private creditors is completed, a move that would trigger a snap election. Elections are scheduled for October 2013.

After weeks of disagreement over the terms of a new bailout, the Greek cabinet approved the latest measures late Friday night. The legislation, which would introduce a new set of divisive austerity measures in a country already five years into a recession, would clear the way for the country's second rescue package since 2010.

Prime Minister Papademos promised on Friday to "do everything necessary" to ensure parliament passes the legislation.

"It is absolutely necessary to complete the effort that began almost two years ago to consolidate public finances, restore competitiveness and economic recovery," he said.

Strike action

Meanwhile, Greek trade unions intensified their general strike on Saturday, hanging a huge anti-austerity banner on the Acropolis in Athens that read: "Down with the dictatorship of the monopoly of Europe." Public transport is at a standstill, and hospitals are operating with emergency staff.

The two-day strike, which has disrupted public transport and other services, was launched Friday as more than 15,000 people took to the streets in violent protests over the new round of cuts.

Police in riot gear were out in force Saturday following the previous day’s clashes in Athens' main Syntagma Square, which saw dozens of youths, some wearing gas masks, throwing petrol bombs, stones and bottles. Eight officers and two members of the public were injured, according to police, while six suspected rioters were arrested. Demonstrations are expected to continue until Sunday.

Drastic cutbacks

The latest austerity measures, which include a 22 percent cut to the minimum wage, 15,000 layoffs in the public sector, pension cuts and belt-tightening in the health and defense sectors, are a requirement set by the troika of international lenders, the European Union, the European Central Bank and the International Monetary Fund. Without the measures, Greece will not receive a second bailout worth 130 billion euros ($170 billion), needed to avoid state bankruptcy in March.

European leaders, however, have called for even stricter cutbacks, with eurozone finance ministers insisting that an additional 325 million euros in cuts are necessary. The ministers will meet on Wednesday to decide whether Greece has met the conditions for this latest rescue package.

The far-right party LAOS, a junior member of Greece's coalition government, said it would not back the new measures and pulled out of the cabinet. Five lawmakers in the 48-member cabinet resigned in protest on Friday, four of them from LAOS and one from the Socialist party. Their resignations follow that of Socialist Deputy Labor Minister Yiannis Koutsoukos on Thursday.

Papademos has promised that the bailout will help return Greece to growth next year.

"A disorderly default would cast our country into a catastrophic adventure. It would create conditions of uncontrollable economic chaos and social explosion," said Papademos, adding that this would eventually lead to an exit from the eurozone.

"Either we will achieve an agreement that will set the country on a new course, or, if we backtrack, in yet another historic display of cowardice, we will head for collapse. I want to be clear. These are not just crucial moments, they are dramatic for the country."

cmk/pfd (AP, dpa, Reuters)