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Greek parliament approves new spending cuts amid protests

February 12, 2012 |  3:07 pm
GreeceREPORTING FROM ATHENS -- As thousands of protesters took to the streets and violence ripped through central Athens, Greece’s parliament on Sunday approved yet another round of punishing public spending cuts to secure international rescue funds and ease fears of a calamitous financial collapse, potentially perilous for global markets and Europe’s single currency.

Although widely anticipated, the outcome offered some respite for Prime Minister Lucas Papademos, visibly drained and despondent three months after being called in to negotiate the complex loan-cum-debt restructuring deal.

On the streets, thousands of austerity-fatigued Greeks descended on the sprawling grounds of parliament shouting “Get out!” and “Thieves!” And as resilient crowds swelled into tens of thousands and a rousing echo of the chants sounded across the capital, violence erupted with mobs of militant youth clashing with police in ferocious street fights.

Failure to pass the bill could have pushed the European Union and International Monetary Fund to withhold funding for this tiny cash-strapped state, leaving it without money to pay a $19-billion bond redemption on March 20.

 Now, parliament’s approval of the bill, including a debt restructuring deal that will shear $130 billion off Greece’s near $500 billion debt, removes the biggest stumbling block to Greece’s desperate bid to secure more time and money to fix its faltering economy.

The vote caps a high-stakes drama that unfolded over the last week as Papademos and party leaders supporting his government acceded to foreign creditors’ demands for beefed-up budget cuts only to be told by European finance ministers, last Thursday, that the measures were not enough.

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-- Anthee Carassava

Photo: On the streets, thousands of austerity-fatigued Greeks clashed with police. Credit: Milos Bicanski / Getty Images

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