Greek cabinet approves EU/IMF bailout bill

Fri Feb 10, 2012 5:47pm EST
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By Lefteris Papadimas and Harry Papachristou

ATHENS (Reuters) - The Greek cabinet approved a draft bill spelling out reforms required by the EU and the IMF on Friday, taking Athens closer to getting a new 130 billion-euro bailout after the prime minister warned the alternative was "catastrophe."

All eyes will now be on parliament, which is scheduled to vote on the bill on Sunday. Analysts expect the deeply unpopular package to be adopted but Greek politics remain highly unstable.

Even after this is done, the EU also wants a further 325 million euros of spending cuts and clear commitments by main party leaders that the reforms will be implemented before it agrees to release the aid.

Technocrat Prime Minister Lucas Papademos told his turbulent coalition government earlier on Friday to accept the harsh international bailout deal or condemn the nation to disaster.

"We cannot allow Greece to go bankrupt," he told a cabinet meeting. "Our priority is to do whatever it takes to approve the new economic program and proceed with the new loan agreement."

Papademos, the sole technocrat in a coalition of feuding politicians, tried to assert his authority after six cabinet members resigned over EU and IMF demands for yet more pay, pension and job cuts in return for the financial rescue.

The austerity plan includes lowering the minimum wage by 22 percent, axing 150,000 public sector jobs and reducing pensions.

"It goes without saying that whoever disagrees and does not vote for the new program cannot remain in the government," he said in televised remarks.   Continued...

<p>Riot police grapple with a demonstrator during protests against planned reforms by Greece's coalition government in Athens, February 10, 2012. REUTERS/Yiorgos Karahalis</p>