Greek PM Papademos receives congratulations as Greek lawmakers approved a new austerity deal in Athens
Greek PM Papademos receives congratulations as Greek lawmakers approved a new austerity deal in Athens Reuters

The European Union (EU) has lauded the Greek parliament for passing a controversial austerity bill over the weekend, amidst violent protests against the measure in the streets of Athens and other cities.

Pressured by EU officials to pass the tough austerity in exchange for another huge bailout (valued at $170-billion), the Greek parliament, which is dominated by the Socialist Pasok party, approved the bitter medicine by a vote of 199 to 74. At least 37 MPs (including Pasok party members) either abstained or opposed the measures.

A number of MPs, including those from the right-wing LAOS party, resigned from government prior to the vote to express their displeasure with more austerity. All told, about 40 Greek MPs and ministers have quit, while other government lawmakers belonging to the Pasok party and the Conservative party have been expelled for opposing the new round of austerity.

Despite all the dissent, the austerity program won a clear cut majority in the Greek parliament.

John Psaropoulos, a correspondent for Al Jazeera in Athens, commented: It is a very important majority for the government it helps legitimize the measures, he said.

Prior to the vote, Lucas Papademos, the Greek prime minister urged passage to avoid a devastating bankruptcy.

It would be a huge historical injustice if the country from which European culture sprang ... reached bankruptcy and was led, due to one more mistake, to national isolation and national despair, he said.

Olli Rehn, the European Commissioner for Economic and Financial Affairs, has asked Athens officials to fully implement the proposed reforms, which include thousands of job cuts in the public sector, a 20 percent cut in the minimum wage, dramatically lower spending on social programs, labor reforms that will make it easier to fire employees and even higher taxes.

The Greek authorities and political forces should now take full ownership and make the case for the second program and fully implement it in order to return the country to stable economic growth and job creation, Rehn said in a statement.

Greek officials were heavily criticized by Brussels when it failed to fully carry out reforms it promised during earlier rounds of bailout negotiations.

Mark Lowen, a BBC correspondent in Athens, wrote that the Greek public’s anger is unlikely to ease anytime soon.

“Euro zone leaders will breathe a sigh of relief that Greece has got over this latest hurdle and the Greek government will expect vital bailout funds to start flowing soon,” he wrote.

“But many ordinary people feel that their country took another leap towards breaking point last night. The big question is when the next crisis moment will come. Is this simply kicking the can further down the road, with Greece's debt level remaining unsustainable in the long run? And will this country - will Europe - at some stage feel that the sacrifices Greece is making to stay in the euro are simply too great?”

Meanwhile, delivery of this new tranche of bailout money is not even guaranteed. The German finance ministry warned that Bonn might not give its final approval for the new payments until early March.

Blanka Kolenikova, an analyst at IHS Global Insight in London, commented that passing the reform package is only the first, and possibly the easiest, step in this lengthy, agonizing affair.

“[Greek] MPs also have to assure its successful and speedy implementation,” she said.

“The markets and Greece's lenders are wary of the country's ‘broken promises’ when the parliamentary passage of previous austerity bills and reforms was swift, but implementation lingered. The government has now pledged to ‘speed up implementation of the reforms in the labor, product and service markets, cut spending, and push through the privatization plan.’ [But] implementation will not be easy, however, as MPs face fierce opposition from the public, while insufficient institutional capacity is also proving a major obstacle. Meanwhile, strong lobbying from affected professional groups (such as pharmacists and taxi drivers) has already postponed liberalization of the labor market and opened up closed professions in the past. The Euro zone officials will require greater oversight of Greece's progress in the future, which could result in even more opposition among Greeks.”

Moreover, it’s not even certain that the proposed reforms – if they are ever actually implemented – will serve to reduce Greece’s debt burden down the 120 percent of GDP by 2020 (as envisioned by officials in both Athens and Brussels).