Greece's two main coalition party leaders back austerity deal

Feb 11, 2012, 13:55 GMT

Athens - Greece's two main coalition party leaders on Saturday urged their deputies to back legislation for new austerity measures as the country races to secure a bailout deal and avert bankruptcy.

Politicians will begin debating the new bailout and a debt-swap bill on Saturday, with voting in the 300-member parliament to take place on Sunday evening.

Additional legislation, such as pension cuts demanded by and agreed with Greece's international lenders, the European Union and the International Monetary Fund (IMF), will be voted on a few days later. The exact time has not yet been determined.

The two main coalition party leaders, Socialist George Papandreou and Conservative Antonis Samaras, told their deputies in separate meetings to back the legislation.

'The other option would be chaotic for the country and we will live through a catastrophe,' said Papandreou, adding that his party 'had inherited a damaged economy' from the conservatives in 2009.

After initially opposing the first bailout received in May 2010 of 110 billion euros (145 billion dollars), Samaras did an about face, insisting that conditions had worsened so much that social cohesion was now at risk.

He threatened to expel anyone who did not vote in favour of the measures, and said snap elections must be held once the agreement was in place and the debt swap with private creditors was completed.

A number of deputies have expressed strong reservations to the new measures, which include a 22-per-cent drop in the minimum wage, public sector layoffs and pension cuts.

The demands by the EU and IMF forced the third coalition party, the right-wing Popular Orthodox Party (LAOS) headed by George Karatzaferis to quit the government and withdraw its four members from the cabinet.

Two more cabinet members, both Socialist deputy ministers, resigned over the austerity package.

While the two parties met to discuss the fate of the country, Greek trade unions scaled up their industrial action and protests on Saturday and places an anti-austerity banner on the ancient Acropolis that read: 'Down with the dictatorship of the monopoly of Europe.'

Approximately 3,000 protesters marched peacefully towards parliament in Athens while another 4,000 demonstrated in the northern port city of Thessaloniki.

Officials are bracing for a much larger, and possibly violent, turnout on Sunday evening to coincide with the parliament vote.

Ferries remained moored at ports across the country and public transport has been paralysed during the second day of a 48-hour strike. Hospitals were also functioning with emergency staff.

European leaders have given Athens until next week to provide guarantees on the austerity measures and on the economic reforms that Greek leaders had promised in return for funding of 130 billion euros.