A disorderly default will be far worse for Greece and its population than the implementation of the country’s second austerity plan, European Commission Vice-President Olli Rhen said on Monday.
The Greek parliament approved early on Monday the deeply unpopular austerity bill envisaging belt-tightening, wage and pension cuts. The bill, however, sparked serious riots in Athens and other Greek cities where people took to the streets to protest the government’s belt-tightening policies.
“Greece’s disorderly default is much worse for its society. That is why, it is better for Greece and its population to show political commitment that this program can be carried through, the debt can be reduced and the country returns to sustainable growth and the labor market improves,” Rhen told journalists.
The bill envisages 3.3 billion euros ($4.35 billion) in wage, pension and job cuts as the price of the 130-billion-euro rescue package from the European Union and the International Monetary Fund, Greece’s second since 2010. Greece needs the funds before March 20 to meet debt repayments of 14.5 billion euros.
Several buildings in Athens were torched last night as tens of thousands of protesters expressed their anger at the austerity plan. About 70 people, half of them police officers, were injured, health authorities said.
Greek Prime Minister Lucas Papademos earlier warned against failing to agree spending cuts, saying Greece was facing “uncontrolled economic chaos.”
The bill is yet to be approved by the Eurozone finance ministers who are expected to gather later this week to decide on the bailout for Greece to help the country teetering on the brink of default to repay its massive 360-billion euro debt.