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Greek parliament approves austerity package

The Greek parliament has narrowly voted in favour of the £25bn package of austerity measures designed to prevent the country defaulting on its debts.

MPs passed the measures by 155 votes to 138. A second vote will be held on Thursday that changes the law and allows the package to be implemented.

The package, proposed by prime minister George Papandreou, of tax increases and spending cuts, must be passed in separate votes today and tomorrow for the country to receive the next instalment of the 110bn euro bail-out from the IMF and EU agreed 12 months ago.

Tens of thousands of Greeks have been taking to the streets since early on Tuesday, in a 48-hour strike against the debt-reduction package.

Yesterday evening, new International Monetary Fund chief Christine Lagarde had called on Greek politicians to unite ahead of the vote on the country’s £25bn austerity package.

She said: “The country’s destiny is at stake. If I have a message this evening about Greece, it is a call to Greek opposition to join in national unity with the party which is currently in power.”

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  1. This is a temporary patch that will require a longer term solution to not only the Greek problem but European debt in general, within the euro currency countries.

    The only way that this will be solved in the long term is if the European Union crates of federal reserve very much like the US model, which would result in European gilts being sold. This is what the Federal Reserve done in 1913, when it found itself in a similar situation as Europe finds itself today. The creation of the US Federal Reserve meant that the US currency became more stable and quickly became the reserve currency for the whole of the world. Until the European Union does a similar thing we will continue to have problems within the European single currency.

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