The Greece financial crisis us being watched by the whole world and the US in particular. Greece approved the first of two austerity measures on today despite worsening street violence, in a vote vital to winning fresh international aid so it can pay its debts on time and stave off bankruptcy.
Lawmakers voted by a clear margin for the five-year framework of $28 billion in spending cuts, tax rises and state asset sales, handing a 155-138 vote victory to Prime Minister George Papandreou.
“We must avoid the country’s collapse at all costs. Now is not the time to step back,” the Socialist premier told lawmakers just before the vote.
The solid margin suggested the government should be able to push through a second package of laws on Thursday, implementing the specific budget measures and asset sales. This would clear the last obstacle to release of 12 billion euros ($17.3 billion) of emergency loans from the International Monetary Fund and European Union, which are essential to meet debt payments by mid-July.
Relief that Greece could avert sovereign default buoyed financial markets. Investors moved from safe-haven assets such as U.S. Treasuries and world stocks advanced for the third straight day. The euro rallied 0.4 percent to trade around $1.4430.
But optimism was muted. It remains unclear whether the government will be able to actually implement the deeply unpopular cuts required to meet a tight schedule imposed by the EU and IMF before the next round of bailout funds are needed.