Wednesday, June 29, 2011

Greece Passes Austerity Plan; 155 For Vs 138 Against

ATHENS (Dow Jones)--Greece's parliament has passed a controversial five-year austerity plan that the country has promised its international creditors.

Voting mostly along party lines, the measure passed with 155 deputies voting for the measure, 138 against and with seven members not casting a vote, according to the president of the Greek parliament.

Although the Socialists won the vote, they suffered one defection who was immediately expelled from the party. One opposition lawmaker with the main opposition New Democracy party voted with the Socialists.

Passage of the additional EUR28.4 billion in spending cuts and new taxes has been set as a condition for another international bailout to keep Greece from defaulting on its debt.

The outcome is a relief for Prime Minister George Papandreou, who has been working hard to ensure that wavering deputies from his own party voted with their party.

"We have to do anything necessary to avoid the country collapsing," Papandreou said just before the voting.

He said that failure to approve the measures would cause the country to run out of money. He also warned that there was "no plan B" if the measures did not pass and that Greece would be "sold off" by its international creditors.

Greece faces another critical test Thursday, when parliament will hold an article-by-article vote on the legislation implementing the austerity plan and a promised EUR50 billion privatization program.

But with the overall outlines of the austerity plan expected to pass Wednesday, the vote on the implementing legislation is expected to be a formality.

-By Alkman Granitsas, Dow Jones Newswires, +30 210 331 2881

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