Euro falls after Greek confidence vote

Europe’s stock markets steadied Wednesday and the euro fell against the dollar after the Greek government survived a no-confidence motion. The vote came after a eurozone ultimatum to MPs to back the government, despite massive protests against austerity measures.

Reuters/Yiorgos Karahalis

Eurozone ministers have told Greece that it must convince them that it will carry out structural changes, cuts and privatisations to receive the 12-billion-euro fifth tranche of an aid package agreed last year.

The inner cabinet was geared to meet under Prime Minister George Papandreou in the afternoon to endorse the austerity drive, which is worth more than 28 billion euros by 2015, his office said.

As 4,000 people demonstrated outside parliament, MPs voted 155 votes to 143 in favour of Papandreou’s Socialist Party (Pasok) government.

"We have to pass two laws by 30 June so that procedures at the eurogroup will move on July 3, enabling the IMF to decide to release the fifth loan instalment on July 8," newly appointed Finance Minister Evangelos Venizelos told parliament on Tuesday.

"After mid-July we will be unable to pay wages and pensions," government spokesperson Elias Mossialos told Skai television on Tuesday.

Athens needs nearly seven billion euros next month just to stay abreast of its loan repayments, a study by Greece's number two lender EFG Eurobank said this week.

The privatisations, which are expected to raise 50 billion euros, were initially announced in February. The delay in putting them into practice means that Greek authorities must hold a sale every 10 days on average this year.

Greece's main unions plan to hold a 48-hour general strike when the new austerity plan heads for parliamentary approval. They claim that the measures will force people who have already suffered to pay once again and that the country is sinking into recession, despite, or because of, the austerity measures already taken.