The tax hikes and spending cuts were required by lenders as a precondition for opening talks on a new multi-year bailout package worth up to €86 billion ($94 billion).
Prime Minister Alexis Tsipras hit out at lawmakers in his leftist Syriza party on Thursday for breaking ranks over the terms of Greece’s bailout, further fuelling speculation of an imminent reshuffle.
The Greek parliament has voted overwhelmingly to pass austerity measures demanded by global creditors, paving the way for a multi-billion pound rescue of the country from financial ruin.
Rioters hurled petrol bombs at police who responded with tear gas during an anti-austerity demonstration outside parliament Wednesday, as Greek lawmakers began debating contentious measures needed to start negotiations on a new bailout and avoid financial collapse.
Draghi also said that Greece – whose debts amount to 180 per cent of economic output – would need some sort of debt relief.
Panagiotis Lafazanis, Greece’s energy minister, said in a statement Wednesday that Greece’s new deal, aimed at preventing it from going bankrupt and crashing out of the 19-nation eurozone, was unacceptable.
RACHEL MAKRI, Greek Parliament Member, Syriza Party (through interpreter): There is no doubt that there is no way for me to say yes on a despicable agreement which will drive more Greek people to poverty and will destroy the development and social fabric of the country, whatever is left of it from the last five years.
Polls published late Tuesday by Kapa Research found 72 percent of Greeks surveyed thought the deal was necessary if tough, but many nevertheless saw it as a humiliating climb-down for a country still reeling from years of painful austerity.
The vote has seen Alexis Tsipras’s Syriza Party split, with many of his MPs voting against the deal he secured with Europe.
After months of talks between Greece and its creditors produced a initial accord on a third bailout on Monday, Merkel may face increased dissent in her own party bloc.
Brussels has proposed seven billion euros (HK$59.5 billion) in bridge financing to keep Greece afloat in July, when it must repay crucial loans to the European Central Bank.
In his address to the deputies, the Prime Minister made no secret of his unhappiness with the offer, which had forced him to backtrack on virtually every campaign promise he made and which many leading economists have condemned as unworkable.
Tsipras said though the deal signed Monday was flawed, the alternative, an exit from the eurozone, was worse.
Dangerously low on liquidity at banks and with the state practically out of cash, Greece desperately needs funds.
Meanwhile, Britain will not help bail out Greece, David Cameron insisted – despite an European Union demand for our taxpayers to cough up £700million.
The clashes died down as a debate got underway in parliament on a new austerity bill.
“Now I think that things will turn out for the best, as long as those in power can act with good intentions, without corruption”, said pensioner Giannis Filinis as he waited in a queue outside a bank to withdraw the maximum 120 euros for retirees without bank cards. On Thursday, he meets the German and French finance ministers.