The streets of Athens erupted on Thursday morning as Greek lawmakers voted overwhelmingly to approve a harsh austerity bill demanded by EU creditors, despite dissent from members of Prime Minister Alexis Tsipras' own left-wing party. Disregarding the recent referendum in which the Greek people voted against further austerity, the bill imposes sweeping tax hikes and spending cuts, fueling anger in the governing Syriza party and leading to a revolt against Tsipras.
The beleaguered Greek PM insisted that the deal, forged after a marathon weekend eurozone summit, was the best he could do to prevent the country from crashing out of the euro. The legislation was approved with 229 votes in favour, 64 against and six abstentions. Among Syriza's dissenters were prominent party members, including Energy Minister Panagiotis Lafazanis and former finance minister Yanis Varoufakis, who many blame for exacerbating tensions with Greece's creditors with his abrasive style during five months of negotiations. The post-midnight vote raised more doubts over whether the ruling party could implement the harsh new austerity program demanded by rescue lenders.
The vote came after an anti-austerity demonstration by around 12,000 protesters outside parliament degenerated into violence. Riot police battled youths who hurled petrol bombs for about an hour before the clashes died down. The bill was the first step Greece must take in order to begin negotiations with creditors on a new bailout of about 85 billion euros in loans over three years. Dissenters argued that Greeks could not face further cuts after six years of recession that saw poverty and unemployment skyrocket.
Greek Prime Minister Alexis Tsipras reacts during a parliament session in Athens on July 15, 2015
Tsipras has been battling all week to persuade party hard-liners to back the deal. He has acknowledged the agreement reached with creditors was far from what he wanted and trampled on his pre-election promises of repealing austerity, but insisted the alternative would have been far worse for the country. "We had a very specific choice: A deal we largely disagreed with, or a chaotic default," he told parliament ahead of the vote.
Finance Minister Euclid Tsakalotos, who took over from Varoufakis the day after the referendum, said the deal Greece reached with its creditors on Monday was the only possible choice. "I must tell you, that Monday morning at 9:30, it was the most difficult day of my life. It was a decision that will weigh on me for the rest of my life," Tsakalotos said. "I don't know if we did the right thing. But I know we did something with the sense that we had no choice. Nothing was certain and nothing is," he told parliament.
Greek Finance Minister Euclid Tsakalotos attends a parliament session in Athens, on July 15, 2015
High-ranking dissenters included Alternate Finance Minister Nadia Valavani, who resigned from her post earlier Wednesday, saying she could not vote in favour of the bill. In a letter sent to Tsipras on Monday and released by the finance ministry on Wednesday, Valavani said she believed "dominant circles in Germany" were intent on "the full humiliation of the government and the country."
The economy ministry's secretary general, Manos Manousakis, also resigned over the measures. Parliament speaker Zoe Konstantopoulou, a prominent Syriza member, slammed the deal as a product of blackmail, calling it a "crime against humanity" and "social genocide."
Thursday's vote came after more than two weeks of capital controls, with Greek banks and the stock exchange shut since June 29 and ATM cash withdrawals limited to 60 euros per day. With its banks dangerously low on liquidity and the state practically out of cash, Greece desperately needs funds. It faces a Monday deadline to repay 4.2 billion euros to the European Central Bank, and is also in arrears on 2 billion euros to the IMF.