Greece Votes Against Drachmophobia

Greece's lawmakers passed a controversial new package of spending cuts by the slimmest of margins on Wednesday night, bringing the debt-ridden country a step closer to qualifying for a 31.5 billion euro bailout instalment.

The ruling coalition suffered seven defections in the socialist and conservative parties, passing the bill by 153 votes in the 300 seat parliament. Socialist Pasok leader Evangelos Venizelos immediately expelled his  six defectors.

The four month-old government now stands severely weakened. On paper, it held a comfortable majority 176 seats. The erosion began more than a week ago, when its smallest member, the 16-seat Democratic Left, said it would not stand with its two coalition partners on this vote. The seven individual defections compounded that institutional one. 

Prime Minister Antonis Samaras spoke frankly about the 13.5 billion euro package. "Many of the measures are correct, namely the structural reforms," he said. "But many others - the cuts to salaries and pensions - are unfair, and we needn't beautify them."

He told the chamber that the 31.5 billion euro bailout instalment would "pump blood into the economy" and push away "drachmophobia", as he termed the fear of a eurozone exit. He said his government was intent on cutting the wasteful spending of patron-client politics, creating a "modern democracy... not a nursery for party acolytes and a soup kitchen for politicians." 

Without the bailout money Greece will go bankrupt by the end of the year.

The opposition accused the government of going back on election promises to focus on growth and jobs rather than more austerity. The bill breaks new ground by reining into the austerity yoke a list of privileged payrolls, such as those of the military forces, that had gone untouched in previous austerity rounds. Finance Minister Yannis Stournaras said the government aimed to remove inequalities and special favours.

But the 300-seat chamber really erupted when parliamentary employees walked off the job in the middle of the debate, in response to an amendment introduced by Stournaras handing him control of their payroll. Dozens of employees tried to storm the chamber. Police locked down the overhead press galleries in case staff should try to occupy them. They picketed lawmakers who tried to enter or leave the chamber. "They are trying to revoke parliament's constitutional right to self-administration," said one. Amongst themselves employees complained about Stournaras. "He's not even an elected official," said one to another. The radical left opposition party Syriza, which opposes the bailout, called for Stournaras' resignation.

Stournaras conceded after just half an hour. "Due to all that is at stake this evening, I am obliged to withdraw the amendment," he told the chamber. "It was not, as some of you wretchedly claimed, a demand of our creditors. It is the wish of all of Greek society."

Parliamentary staff, reputed to be some 1,700 strong, are one of the state's favoured payrolls. "The protests inside parliament won out over the protests outside," said one conservative MP. 

The bill raises the retirement age from 65 to 67 in the public and private sectors, axes holiday bonuses for retirees and cuts pensions by five to fifteen percent. It takes approximately two billion euro out of the state payroll. 

For Greece to get the 31.5 billion euro, parliament also needs to pass the 2013 budget on Sunday night. This promises to be less of a cliffhanger. Democratic Left will return to the fold for that, its leader, Fotis Kouvelis, says. His party backs the bailout process, but feels that wage reductions have little to do with reviving the economy, now in its fourth year of recession. "We cannot but reject a neo-liberal model of competitiveness," said Kouvelis. "Labour cannot alone lift the burden of fiscal adjustment." 

Even with Democratic Left's support assumed, which is perhaps a risky assumption, the government majority is reduced to 169, after its first legislative battle.