Greek Parliament should endorse the second Bill of austerity

Overview of the Greek as Parliament Prime Minister George Papandreou spoke (C) Athens, June 29, 2011.

Credit: Reuters/Giannis Liakos/ICONBy Dina Kyriakidou and Renee Maltezou

ATHENS | Thursday, June 30, 2011 6 pm EDT

Athens (Reuters) - the Greece Parliament should pass a second Bill of austerity Thursday to allow the country to avoid bankruptcy by getting a slice of loan of 12 billion euros ($17 billion) of the EU and the IMF.

After two days of violent demonstrations just metres (yards) from where members adopted an initial act of austerity on Wednesday, they began to discuss detailed measures to implement EUR 28 billion in spending cuts, increases and privatization.

Dangerously close Greece to the default value that would trigger chaos on the financial markets, the European Union and the Monetary Fund International demanded that the two bills of austerity transmitted before it releases the next batch of bailout EUR 110 billion agreed last year.

In a hand for Socialist Prime Minister George Papandreou, the conservative opposition said it is willing to support measures in the second vote after having opposed the first invoice of austerity.

"We will do our utmost to support the Government," said the legislator of the new democracy Nikos Dendias, a former justice Minister. "We will vote for two chapters of the Bill today."

Parliament resumed debate at 9: 30 am (0630 GMT) and the decisive vote was not expected to begin before 2 pm (1100 GMT) with results emerging some time in the afternoon.

Voting will be by roll-call, with members called to vote on both the general principle of the Bill and of the individual articles. Papandreou has called a meeting of the Council of Ministers after the vote.

While the Socialist lawmakers are expected to back the legislation as a whole, some said that they opposed individual clauses, such as increases in a levy on heating oil and an increase of the minimum income tax threshold.

In an effort to convince the undecided, new Minister of finance Evangelos Venizelos offered some concessions on tax increase as threshold exempt from tax for families with children.

The first austerity Act, which describes the hard program cuts and selloffs, passed by 155 votes to 138. Approval of the second would allow euro-zone finance ministers delete the release of EUR 12 billion at a meeting Sunday.

Approval by the IMF is expected on July 5, averting the immediate threat of failure.

After that, attention will switch to a second rescue plan, roughly equivalent to the EUR 110 billion rescue plan agreed in May 2010, including the Greece needs to continue until 2014.

UPCOMING ISSUES

Global stocks rallied Thursday for the third consecutive day and the euro reached its highest level of the dollar in 20 days on a sense of relief that looked like Greece to avoid the first bankruptcy of debt in the euro area.

Calm returned Thursday two days of violent protests that have blocked the city centre and the Centre of Athens, who was paralyzed during a strike for 48 hours from the ground by the powerful labor unions sectors public and private.

Teams of street cleaners swept broken masonry and broken glass after a night of clashes in the vicinity of square Syntagma right in front of the Parliament.

But protest banners and tents remained in place Syntagma, where demonstrators camped during more than a month show their anger at austerity measures at the wheel of many Greeks to despair in the worst recession since the 1970s.

"The implementation Act will pass, without problems," said Costas Panagopoulos, head of pollsters ALCO. "The problem for Papandreou is not in the Parliament, it is what is happening outside of Parliament: not implemented Syntagma, which is a few hundred demonstrators, but with all of the Greece 11 million people."

With the ordinary Greeks to years of standard of living fall as the Government struggles to slash a mountain of debts amounting to more than 150% of the gross domestic product, transforming action laws will be a major challenge.

Trade unions have promised to oppose privatization and other austerity measures. The Socialists, which interrupted the process of privatization of the Greece when they came to power, must sell 5 billion euros in assets this year or risk missing the targets within the framework of its EU agenda and the IMF, which would have cut funding once more.

"If Papandreou and Venizelos miss this last chance, and not to pursue the necessary reforms and a true skin of grief in the State of waste, they and the country will be an explosive situation in the fall at no way out"centre-right daily Kathimerini wrote in an editorial."."

(Additional by Harry Papachristou and George Georgiopoulos, written by James Mackenzie; editing by Mark Heinrich)