Greeks vote for taxes but Germans rebel

THE Greek government managed to persuade its members of parliament to vote for further austerity measures yesterday, a crucial step in securing its next tranche of aid to avoid a default next month.

All the ruling Socialist party’s 154 MPs, plus one independent, voted to impose a controversial new property tax that aims to raise €2bn per year, in what observers said was an encouraging sign of party discipline in support of the country’s aid programme.

But the vote prompted a fresh round of unrest on Athens’ streets, with reports of police and protestors exchanging tear gas and stones in the central Syntagma Square. Public sector unions are due to stage two days of strikes next month, meaning that despite the vote, Greece could fail to implement the measures.

Inspectors from Athens’ international lenders – the troika of the ECB, the European Commission and the IMF – are due to return to Greece today to resume their review of its finances so as to pay out €8bn in October.

Across the continent, German MPs delivered the opposite message for chancellor Angela Merkel’s ruling coalition. In a mock vote on changes to the region’s bailout fund – a vote that will be held for real tomorrow – Merkel’s ruling coalition suffered a rebellion that would see her having to rely on opposition votes to get the changes through.

That would be a humiliating blow for the German government, raising the spectre of further political trouble down the line.

The measures to be voted on tomorrow will expand the bailout fund from €440bn to €780bn but contain no provision to let it borrow money – a key point of contention in Brussels.