EU, Germany, relieved over Greek vote, urge implementation

Feb 13, 2012, 13:17 GMT

Athens - Top officials in Brussels and Berlin welcomed Monday the approval by the Greek parliament of a new round of austerity measures, but urged the country's politicians to ensure that badly needed economic reforms are implemented over the coming months.

Sunday's vote was 'an expression of the determination prevailing in the country to put an end to the spiral of unsustainable public finances and to the loss of competitiveness,' European Economic and Monetary Affairs Commissioner Olli Rehn said in Brussels.

And while the European Union 'continues to stand by the Greek people,' the country's politicians should 'fully implement' reforms 'in order to ensure the return of the country to sustainable economic growth and job creation,' Rehn said.

The alternative, a default on Greek debt, 'would be a worse outcome for Greece, with devastating consequences for Greek society,' Rehn added.

In Berlin, German Chancellor Angela Merkel said the Greek parliament vote was a 'very important' step, but stressed that it was now time to push through reform programmes that go beyond spending cuts.

'This is not just about saving, it is also about structural reform and, on top of this, the European Union will help the institutions to be better set up,' Merkel said.

'It is important for us that Greece has a chance to return to the markets in the year 2020 with a debt sustainability of 120 per cent,' the chancellor added.

Such a debt ratio - down from the current 160 per cent of gross domestic product - is a condition set by the International Monetary Fund and Greece's European partners to be eligible for a second bailout package.

Eurozone finance ministers are due to meet on Wednesday to finally approve emergency loans worth 130 billion euros (171 billion dollars), money which Athens needs as soon as possible to avoid defaulting on its debt.

In Athens, government spokesperson Pantelis Kapsis said the country had until Wednesday to provide its eurozone members with written guarantees. He said general elections are to be held in April.

In another dramatic day for Greece, thousands of protesters, many of them wearing masks, marched through the streets of Athens on Sunday and clashed with the police as lawmakers gathered to approve massive lay offs in the public sector and cuts to pensions and to the minimum wage.

Nearly 170 police officers and protesters were injured and officials arrested at least 74 people and detained another 92.

The Athens Municipality said 93 buildings were set on fire or seriously damaged, among them nine national heritage buildings.

Firefighters could be seen dousing smoldering buildings, including the capital's oldest cinema, which is housed in a building dating from 1870.

Athens Mayor Giorgos Kaminis said the clashes, the worst Greece has seen in decades, had caused irreparable damage to the city.

The stench of tear gas and burned buildings still hung in the air Monday morning, choking passers-by.

'My shoe business, which has been in my family since 1978, has been burnt to the ground because rioters targeted a bank which is located next door,' an elderly man said from the ruins of his store in Athinas Street, in the historic section of the city. 'They took most of my merchandise,' he added.

Violence was also reported in six other cities, the worst of which took place in central Volos, where the town hall and a tax office were damaged by fire, police said.

Sunday's clashes erupted after more than 200,000 protesters marched to the parliament to rally against the measures being imposed by Greece's international lenders.