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It's 'Do-Or-Die' For Greece As Lawmakers Vote Amid Bankruptcy Fears

greece 062911

It is a "do-or-die" for Greek lawmakers as they vote later on Wednesday on more painful austerity measures, without which the country faces a potentially disastrous default on its financial obligations in the coming weeks.

Although the new Greek government won the Parliament's confidence vote last week, it is not yet sure whether the House will adopt harsh austerity measures that have triggered nationwide strikes and the worst rioting in Athens for more than a year.

Scuffles broke out early on Wednesday as anti-government demonstrators attempted to block Deputies, who were traveling along a major avenue leading to the center of the city and toward the Parliament.

Injuries were reported in tear gas firing and pepper spray by riot police. Violent clashes continued throughout the night in Athens after the police fired tear gas to disperse a crowd of angry protesters as tens of thousands of striking workers marched through central part of the Greek capital.

The 48-hour shutdown by public and private-sector unions began a day after Greek lawmakers started a three-day debate on the new austerity measures. Addressing Parliament on Monday, Prime Minister George Papandreou said the proposed expenditure cuts alone would enable the country to tide over its debt crisis.

However, if the government fails to enlist enough support for the ambitious series of fiscal measures and privatizations, the country could well be looking down the barrel as the EU, European Central Bank and the International Monetary Fund may pull out of the 110-billion euro bailout package.

"The approval of these measures will not only enable a rapid disbursement of the next tranche of financial assistance for Greece; it will also mark a big step in Greece's journey back towards sustainable public finances and a return to growth," European Commission President Jose Manuel Barroso said in a statement last Wednesday hailing the government's success in winning the confidence vote.

Earlier this month, the eurozone countries withheld payment to Greece its next tranche of 12 billion euros, ($17 billion), which was necessary to save the country from the immediate risk of default.

Greece's financiers have made it clear that the funds will be released only after the cost-cutting measures are ratified by the Greek Parliament.

At the EU summit in Brussels last Thursday, European Union leaders pledged more financial aid to Greece to avoid a bankruptcy on condition that the Greek Parliament passes an austerity plan agreed with the troika.

The Parliament will hold a two-part vote on Wednesday and Thursday on the financial reform bills, which envisage 28 billion euros in expenditure cut and tax hikes, planned to take effect by 2015, as well as a 50-billion euro privatization plan.

If the austerity bill is not passed, Greece stands to become the first eurozone member to default on its debts, likely sparking panic in global financial markets.

The Greek crisis has not only spread concerns all over the European community, but also rattled global markets.

Papandreou, who survived a party revolt this month, has appealed to Deputies from his Socialist PASOK party and the Opposition New Democracy party to back the four-year program of spending cuts and tax hikes.

The vote will be a close call for the Prime Minister, whose party has 155 Deputies in the 300-member Parliament.

Ruling party lawmaker Alexandros Athanasiadis said he would definitely vote against the bill, while his colleague Panayiotis Kouroumblis told Greek television that he still had reservations about the austerity plans and was not sure how he would vote.

However, both conceded that even without their votes, the unpopular bill was likely to be passed.

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