Greece's coalition party leaders back bailout deal

DEMETRIS NELLAS Associated Press Published:

ATHENS, Greece (AP) -- The leaders of the two parties backing Greece's coalition government made dramatic appeals to their deputies Saturday to back legislation that calls for harsh new austerity measures -- essential if Greece is to get a new bailout deal worth €130 billion ($171.6 billion) and stave off bankruptcy.

Prime Minister Lucas Papademos is expected to give a televised address later Saturday to defend the deal.

Debate on emergency legislation approving the new bailout and a debt-swapping deal with private creditors began in committee Saturday afternoon. A plenary session will debate and vote on it Sunday. Further legislation detailing the measures demanded by, and agreed with, Greece's public creditors, the European Union and the International Monetary Fund, will be up for vote a few days later. The exact time has not yet been set.

Both leaders -- socialist George Papandreou and conservative Antonis Samaras -- as well as Finance Minister Evangelos Venizelos, a socialist, used stark images of a country under bankruptcy to warn their respective parliamentary groups of the importance of their vote.

"If we do not dare today, we will live a catastrophe," Papandreou said.

"What do you want, a country where food will be handed out with food stamps and where we will have no fuel?" Samaras angrily told a dissenting deputy.

"The battle is now. The war is now. If we falter, nothing will be left standing...The real dilemma is between painful measures and crushingly painful ones," Venizelos told socialist lawmakers.

Deputies are wary of voting for the measures, which include wage and pension cuts and the prospect of more to come, along with the firing of several thousand civil servants and the shutdown of several state agencies, including welfare agencies. The demands of the EU and the IMF have caused one of the original coalition parties -- the populist right-wing Popular Orthodox Party -- to quit the government and withdraw its four members from the cabinet. Two more cabinet members -- both socialist deputy ministers -- have also quit, citing their disagreements with parts of the austerity package.

Both Papandreou and Samaras made it clear that dissenters would have no place in the party. Samaras was more emphatic, threatening to expel those who did not vote in favor and exclude them from the lists of party candidates in the next election. "I want to make it absolutely clear ... rebels or 'bravehearts' have no place in (the party's) candidate lists," he said.

"I call on you to fall in line and vote for this difficult and painful deal that will help (the country) stand on its feet. Whoever has a conscience problem, can resign," Papandreou told his lawmakers.

Despite their leaders' calls, at least four deputies from each party openly declared they would vote against, while two socialist deputies -- both former ministers -- hinted they might do so. None offered to resign.

Together, the socialists and the conservatives have 236 deputies in the 300-member parliament.

Samaras also called for an immediate election once the bond swap deal with Greece's private creditors is over, saying he would not agree to the extension of the mandate of the coalition government beyond that date. Elections are normally due in October 2013. The bond swap deal with Greece's private creditors is expected to help Greece get rid of some €100 billion of its debt. The bond swap must be completed before March 20, the redemption date for €14.5 billion worth of bonds. Elections could then be held about three weeks later than that, at the earliest.

While the two parties met, union leaders staged a demonstration outside parliament that attracted about 4,000 protesters, according to the police -- while 5-6,000 policemen patrolled the streets of Athens. The protest ended with some scuffles that left two people injured when police tried to clear the street in front of parliament. Authorities are bracing for a much larger, and possibly violent, one on Sunday evening.

Another 4,000 turned out for a peaceful demonstration in Thessaloniki, Greece's second city.

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Costas Kantouris in Thessaloniki contributed to this report.