Greek Parliament Votes in Favor of Austerity Plan, Staving Off Risk of Default

Greece’s Parliament on Wednesday voted in favor of an austerity plan demanded by the country’s foreign lenders before they would provide it with a financial rescue package and avert a debt crisis that could have shaken its European neighbors and economies throughout the world.

The austerity steps, which include wage cuts, tax increases and privatizations in a recession-starved country, were required to unlock the next installment of aid that the country needs to avoid default on its debts.

The Socialist Party of Prime Minster George Papandreou won by a simple majority, 155 to 138, with all but one lawmaker from the party voting in favor and one opposition deputy voting crossing party lines to support the measure. (Five others voted present, and two members were absent.)

Stock markets, which began rallying earlier in the day across Europe and much of Asia amid indications that the measures would be approved, moderated after the vote. Investors had feared that a collapse in Greece might have repercussions throughout the international financial system. Two other European Union countries — Ireland and Portugal — have also turned to international lenders for assistance.

Mr. Papandreou and Antonis Samaras, the leader of the main opposition party, New Democracy, clashed in Parliament just before the vote, accusing each other of letting down the country.

“All of Europe knows that your party is responsible for the current situation,” Mr. Papandreou told Mr. Samaras, alluding to the debt that ballooned in 2009 when New Democracy was in power. Mr. Papandreou, who made several failed overtures to the opposition for political consensus on the austerity measures, made a last-ditch appeal to the conservatives to back the program. “Don’t bet on failure,” he said.

The prime minister said the European Union was also to blame for failing to call the previous government on its dubious statistics. But Mr. Papandreou said Greece’s foreign creditors — the European Union and the International Monetary Fund — had given “a vote of confidence in the Greek people” by offering rescue financing.