Greek leader promises austerity plan will pass

Riot police try to avoid a gasoline bomb during clashes in Athens on Friday. Thousands took to the streets of the capital as unions launched a two-day general strike against planned austerity measures on Friday, a day after Greece's crucial international bailout was put in limbo by its partners in the 17-nation eurozone.
Riot police try to avoid a gasoline bomb during clashes in Athens on Friday. Thousands took to the streets of the capital as unions launched a two-day general strike against planned austerity measures on Friday, a day after Greece's crucial international bailout was put in limbo by its partners in the 17-nation eurozone. (THANASSIS STAVRAKIS / Associated Press)
Posted: February 11, 2012

ATHENS, Greece - Greece's future in the eurozone came under renewed threat Friday as popular protests again turned violent and dissent grew among its lawmakers after European leaders demanded deeper spending cuts.

The country's beleaguered coalition government promised to push through the tough new austerity measures and rescue a crucial $170 billion bailout deal after six members of the cabinet resigned.

Prime Minister Lucas Papademos promised to "do everything necessary" to ensure parliament passes the new austerity measures that would slap Greeks with a minimum-wage cut during a fifth year of recession. He also promised to replace any other cabinet members who did not fully back his efforts.

"It is absolutely necessary to complete the effort that began almost two years ago to consolidate public finances, restore competitiveness and economic recovery," Papademos told an emergency cabinet meeting. Draft legislation for the new austerity measures was submitted to parliament after the five-hour meeting.

In central Athens, clashes erupted outside Parliament between dozens of hooded youths and police in riot gear. Police said eight officers and two members of the public were injured, and six suspected rioters were arrested.

The violence broke out as more than 15,000 people took to the streets of the capital. Unions launched a two-day general strike that disrupted transport and other public services and that left state hospitals running with only emergency staff.

Debt-stricken Greece does not have the money to cover a $19.1 billion bond repayment on March 20, and it must reach a vital debt-relief deal with private bond investors before then.

Papademos said the bailout and the deal with private creditors would return Greece to growth next year and deliver a 4.5 percent primary surplus in 2012 - better than an earlier official prediction of 1.1 percent of gross domestic product.

"A disorderly default would cast our country into a catastrophic adventure. It would create conditions of uncontrollable economic chaos and social explosion," he warned.

"Greeks' standard of living in the event of a disorderly default would collapse, and the country would be swept into a deep vortex of recession, instability, unemployment, and penury," Papademos said.

He also warned that "either we will achieve an agreement that will set the country on a new course, or, if we backtrack in yet another historic display of cowardice, we will head for collapse."

Earlier Friday, the small, right-wing LAOS party in Papademos' coalition said it would not back the new measures. Four of its cabinet officials resigned. Two Socialists members have also quit.

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