Greece seeks relief from lenders after austerity vote triggers rioting, political revolt

Economic Indicators Associated Press

Greece's troubled left-wing government is seeking urgent relief from European lenders on Thursday, a day after it pushed a harsh austerity package thought parliament, triggering a revolt in the ruling party and violence demonstrations in central Athens.

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Finance ministers from countries using the euro currency will hold a conference call to consider rescue financing for Greece, while the European Central Bank will mull a request from Athens to increase emergency assistance to troubled Greek banks that have been closed since July 29.

In a post-midnight vote, Greece's parliament voted 229-64 to implement more austerity measures that include pension cuts and sweeping sales tax hikes. But the large majority was provided by pro-European opposition parties and in spite of deepening dissent within Prime Minister Alexis Tsipras' left-wing Syriza party.

Thirty-eight party lawmakers defied Tsipras — nearly in one-in-four — including Tsipras' powerful energy minister, the speak of parliament, and Yanis Varoufakis, the former finance minister who headed Greece's bailout strategy until his replacement 10 days ago.

The government described the vote as marking a "serious division" among its lawmakers, and indicated that dissenters in Tsipras' cabinet would be swiftly replaced in a Cabinet reshuffle.

Greeks have seen a dramatic decline in living standards since the debt-plagued country lost market access in 2010 and had to impose severe spending cuts in exchange for bailout loans from eurozone countries and the International Monetary Fund.

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Before the austerity vote, some 12,000 demonstrators gathered outside parliament in the biggest protest against the government since Tsipras won elections in late January. The rally turned violent and several hundred youths attacked police, torched cars, and smashed office displays.

Police said about 50 people had been detained during the hour-long clashes that involved youths hurling rocks and petrol bombs outside parliament, and riot police responding with tear gas and baton charges.

Tsipras said he had little choice other than to accept the harsh terms offered by lenders for the new three-year bailout worth 85 billion euros ($93 billion).

"We had a very specific choice: A deal we largely disagreed with, or a chaotic default," he told parliament ahead of the vote.

Syriza won the January election on a promise to end austerity, and the government acceptance of more cuts drew an angry reaction from many of its lawmakers — though none of the attacks were aimed at Tsipras.

Parliament speaker Zoe Konstantopoulou slammed the deal as a product of blackmail, describing the additional poverty it would cause as an act of "social genocide."

The vote came after more than two weeks of capital controls, with banks and the stock exchange shut since June 29 and ATM cash withdrawals limited to 60 euros per day.

Dangerously low on liquidity at banks and with the state practically out of cash, Greece desperately needs funds. It faces a Monday deadline to repay 4.2 billion euros ($4.6 billion) to the European Central Bank, and is also in arrears on 2 billion euros to the IMF.

Negotiations on the new bailout will take an estimated four weeks, leaving European finance ministers scrambling to find ways to get Athens some money sooner.

The European Commission has proposed giving Greece 7 billion euros in loans from a special fund overseen by all 28 EU nations so it can meet its upcoming debts.

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