Greece took a major step towards meeting its obligations in order to receive the agreed €86bn ($128bn) bailout, after its parliament passed a second set of reforms in the early hours of Thursday morning.
Despite fears of a rebellion by SYRIZA MPs, in the end Prime Minister Alexis Tsipras gained the support he required easily, with 230 votes in favour and 63 against. Almost half the dissenting MPs were members of his own party.
Unlike last week’s vote, this time around Yanis Varoufakis voted with the government; the former finance minister declaring that he felt it important “to protect the unity of SYRIZA” even though he believed the program agreed with the creditors was “designed to fail”.
The reforms passed include changes to the banking system to protect savers’ deposits of less than €100,000 ($150,000) and the introduction of rules to ensure shareholders and creditors – not taxpayers – cover the costs of a failed bank.
Meaures were also taken to overhaul the judiciary system.
During the debate Mr Tsipras told the parliament once again that he was not happy with the measures that the lenders had imposed.
“We chose a difficult compromise to avert the most extreme plans by the most extreme circles in Europe,” he told MPs, adding that the deal was the only way Greece could remain in the eurozone.
Negotiations will now begin with the creditors on agreeing the detailed terms of the bailout. Due to be completed within a month, a likely scenario is that once concluded, the full agreement will usher in early elections.
However major sticking points are still possible. The most contentious measures – including the phasing out early retirement and tax hikes for farmers – have been pushed back to August.
Meanwhile Greeks this week faced a new era of austerity. They woke on Monday able to enter banks for the first time in weeks, but with Value Added Tax increased from 13 per cent to 23 per cent, the cost of the bailout deal was immediately felt in their pockets.
Many everyday supermarket basics have increased in price. Services hit by the increase include restaurants and cafes, funeral parlours, taxis, and the much used tutorial schools – held precious by tens of thousands of parents trying to give their kids a better start in life.
To get a sense of the mood across the country this week Neos Kosmos spoke to a handful of those affected.
27-year-old Stav Balafas in Athens was shocked by price increases to the most basic necessities.
“We’d get coffee and sparkling water every day for €4 and the next day we were surprised to pay €5. They listed coffee and sparkling water under luxury goods. Even tea is seen as luxury goods. No joke.
“People are concerned about public transport tickets prices, taxis and petrol getting more expensive. Air, bus and even boat fares are up. The internet and phone calls got a top-up.”
Valia Evangelatou (26) in Chios thinks the imposition of higher tax rates for virtually identical products is confusing.
“Normal bread stays the same, bread with olives gets a hike. Normal milk stays the same, chocolate milk goes up. You need to have a masters degree in advanced economics to figure it all out,” said Ms Evangelatou.
Despina Varsami (21) on holiday in Chania was bemused by the jump in price of that modest staple – the souvlaki.
“I swore to eat one a day while I’m here. It used to be €1.80 and now it’s €2.30. I wonder if they taxed each ingredient separately!”
Ilias Katrakis in Chalkidiki says the VAT hike will not get to the root of Greece’s economic problems but instead hit the poorest.
“The increase will once again hurt the little man when we should be looking at tax evasion.
“I say increase the VAT to 28 per cent for cash transactions but keep it at 18 per cent for card transactions. This will offer the incentive to move away from our outdated cash system, which is a huge part of the problem.”
Kosta Karageorgiou in Mykonos echoed his sentiments. “People need to start paying taxes, yes, mainly the rich, but not on basic commodities and tourism. Tourism is what keeps this country alive and right now the prices are unappealing even to holiday makers from abroad.”
Panagiota Stamou (26), a single mum living in Thessaloniki, sums up the mood of most Greeks who expected more from a government that vowed to fight austerity.
“I’m struggling to make ends meet on a salary of just €400 a month. If the price of food, electricity and water goes up, but my wage stays the same there is absolutely no way I can survive, “says the 26-year-old Ms Stamou.
“My child and I are already living on the absolute bare minimum. I didn’t vote SYRIZA for this. I voted for change. I voted ‘No’ This is far worse than anything I expected from them”.
source:Neos Kosmos
STUDIO 3 NEWCASTLE AUSTRALIA 