The Greek Parliament passed an austerity package today, but the possibility of default still looms.
Greek lawmakers under terrific urging from European Union officials today voted 155 to 148 to accept a package of austerity necessary to avert a government default and avoid a feared chain reaction of market turmoil around Europe and the world.
Markets were optimistic before today’s vote that Greek politicians would ignore a howling public that polls as high as 80 percent opposed to the $40 billion in government spending cuts and tax hikes that are the price of the international bailout that's staving off default. Other struggling “peripheral” euro-zone members, including Ireland, Portugal, Spain and Italy, are anxious not to suffer the negative market consequences of a Greek default.
The current Greek crisis, the second in slightly more than a year, is seen by some as a possible harbinger of European disunity, a turning point for greater isolation between the 17 eurozone members. Others see it as a necessary spur towards deeper integration.
Prime Minister George Papandreou framed today’s vote in historic terms and together with new finance minister Evangelos Venizelos, a heavyweight in the ruling Pasok party, pushed through the package and also avoided defections that could have brought the government down.