Greek Government Declares More Cutbacks

The Greek parliament approved a new austerity package yesterday. This most recent round of austerity measures includes cutting 150,000 public sector jobs over three years, cutting the minimum wage by 22 percent, and cutting pensions by 300 million euros.

The European Union approved of the cutbacks. Its top economic official, Olli Rehn, called the vote a “crucial step forward” for Greece to be able to receive bailout funds. The EU is desperately trying to get the Greek economy under control and circumvent bankruptcy.

“A disorderly default of Greece would be a much worse outcome with devastating consequences for the Greek society especially for the weaker members of the Greek society,” Rehn told reporters today in Brussels. “It would of course also have very negative ramifications through the contagion effect and chain reactions through the whole European economy.”

Sunday’s legislation was also a show of strength for Lucas Papademos, Greece’s caretaker prime minister. Papademos was installed by the EU and is considered someone who will push through the painful reforms that EU officials are demanding.

Commissioner Rehn has said that Greece’s political leadership needs to take “full ownership” of the new package. He is among many EU leaders who are demanding that Greece’s other political leaders sign a pledge to implement these measures after elections in April.

The vote was a clear victory for the EU, but many in Greece saw it as a loss.

Over the weekend, more than 100,000 protesters marched to parliament to oppose the reforms. On Sunday afternoon, riots erupted in several Greek cities, and lasted through the night. A bank was burned, and 170 people were injured.

Continue to watch this explosive issue to see if Greece will continue on the path of austerity chosen for it by the EU, or whether it will try to maintain its sovereignty and default on its debts. Either way, expect Greece to fall and to be exploited by its European neighbors.