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Greek Lawmakers Back Reforms, Clear Way For More Aid


Greek riot policemen stand in smoke during clashes with demonstrators in front of the parliament in Athens on June 29.
The Greek parliament has approved detailed austerity and privatization bills in a crucial vote to secure emergency funds and avert imminent bankruptcy, but longer-term dangers still lurk.

Prime Minister George Papandreou secured a majority for the legislation after lawmakers backed a five-year, 28-billion-euro austerity plan on June 29, clearing the last obstacle to the next slice of aid from the European Union and the International Monetary Fund.

The euro and global stocks rose to three-week highs in anticipation of the vote as investors expressed relief that the specter of a sudden summer default had been avoided, despite fierce public opposition to more pay and spending cuts.

Belgian Finance Minister Didier Reynders said eurozone finance ministers were likely to agree as a result to release a next tranche of loans to Greece at a meeting on July 3. The IMF is set to follow suit on July 5.

That 12-billion-euro loan will prevent Greece defaulting in mid-July or at the latest on August 20, when it must honor a big bond redemption, and shift the focus to a second assistance package likely to be about the same size as last year's 110-billion-euro bailout.

Prime Minister George Papandreou's Socialist government may find it hard to enforce tax increases and state asset sales against massive public resistance, while a violent fringe always present in Greek politics has burst to the fore.

Rioters armed with stones and clubs fought several hours of running battles with police firing huge clouds of tear gas in central Athens until the early hours of the morning, leaving gutted shop-fronts, shattered windows, and a field of debris.