ATHENS, (Reuters) – Greece’s embattled government survived a confidence vote on Wednesday that was crucial to avoiding a sovereign default, as thousands of protesters chanted insults outside parliament.
The assembly voted confidence in the government, reshuffled by Prime Minister George Papandreou to stiffen resolve behind a painful new austerity programme, by 155 votes to 143 with two abstentions.
All Papandreou’s Socialist Party deputies voted solidly with the government. “If we are afraid, if we throw away this opportunity, then history will judge us very harshly,” Papandreou said in a final appeal for support before the vote.
Protesters besieged the parliament, chanting slogans against the politicians, shining hundreds of green laser lights at the building and into the eyes of riot police outside and pushing their hands forward in a traditional insult. They held up a mock gallows with several nooses.
The successful vote, closely watched outside Greece, had an immediate impact with the euro making gains, although traders said continuing concerns about implementation of the measures contained the rise.
European Commission President Manuel Barroso expressed immediate relief. “Tonight’s vote in the Greek Parliament removes an element of uncertainty from an already very difficult situation,” he said, adding that Papandreou could now concentrate on implementing the reforms.
“Although this clearly is not going to be a long-term fix, investors see this as a chance that the can will be kicked further down the road and so I think we are going to see tomorrow a world-wide push to risk assets,” said David Dietze, Chief Investment strategist at Point View Financial Services.
Papandreou’s government must rapidly pass two more tests — enacting the austerity plan and the laws needed to implement it — to win a new bailout to avert the euro zone’s first sovereign default and possible global economic disaster.
The vote follows a European ultimatum requiring the debt-choked Mediterranean state implement a new five-year package of deeply unpopular reforms in two weeks or miss out on a 12-billion euro aid tranche and plunge into bankruptcy.
Barroso had piled on pressure before the vote, saying that Greece faced a “moment of truth” and needed to show it was genuinely committed to the reforms.
“No-one can be helped against their will,” he said.
Acting IMF chief John Lipsky sent a similar message, saying international lenders were willing to help peripheral euro zone economies as long as they tried to carry out reforms.
He said the Greek fiscal system was broken but could be fixed with the right political will.
As parliament debated the confidence motion, demonstrators stepped up their protests in the square, where hundreds have camped for weeks to show their opposition to more austerity, which has deepened the worst recession for 37 years. “I believe we should go bankrupt and get it over with. These measures are slowly killing us,” said 22-year-old student Efi Koloverou. “We want competent people to take over.”
Glykeria Madaraki, a 39-year-old unemployed woman, said: “God help us. There is no way these people are getting us out of the crisis. I feel insecure and I see my country being sold off. They didn’t ask what we think about all this. I want elections.”
Inside parliament the opposition poured similar disdain on the government. “This is not a programme to salvage the economy, it’s a programme for pillage before bankruptcy,” said Alexis Tsipras, head of the small opposition Left Coalition.