By CARLO PIOVANO, Associated Press
LONDON (AP) — Global markets reacted positively Monday after Greece's parliament approved a new set of austerity measures required by international lenders in exchange for a bailout that would save the country from bankruptcy next month.
Drastic cuts in civil service jobs, minimum wages and welfare were among the reforms that lawmakers approved in Athens, where anti-austerity rioters clashed with police and torched dozens of buildings. The protests, part of a surge in sentiment against the foreign demands for cuts, saw 68 police and 70 protesters hospitalized.
Eurozone finance ministers will meet Wednesday to discuss progress in making Greece's debt talks, though the approval of the euro130 billion ($170 billion) bailout package is not expected before early March.
Greek party leaders will have to make a commitment in writing to adhere to the austerity reforms even after an April general election and identify another euro325 million ($431 million) in savings. Parliaments in Germany, Finland and the Netherlands will then have to vote on the bailout package, at then end of February, before it can be formally approved.
Eurozone countries also want to see what percentage of Greece's private creditors take up the offer for a related bond swap before they clear more help for Athens.
Without the bailout and the bond swap deal, Greece will be pushed into a disorderly default on bond repayments on March 20, likely pressing it into a disruptive exit from the euro common currency. That would see cause the country's financial sector to collapse, fueling further social unrest and destabilizing the wider European and global markets.
Analysts at Credit Agricole CIB noted in an email to clients that the parliament vote "did not come without major cost in the form of escalating protests and violence within Greece."
"At least for today the market tone will be a positive one as attention shifts to a meeting of EU finance ministers on Wednesday," the note said.
Britain's FTSE 100 was up 0.9 percent at close to 5,905.7 while Germany's DAX added 0.7 percent to 6,738.47 and France's CAC-40 was up slightly at 3,384.55 after Japan's Nikkei 225 closed 0.6 percent higher at 8,999.18.
Wall Street also higher, with the Dow Jones industrial average up 0.4 percent to 12,848.1 and the S&P 500 gaining 0.5 percent to 1,348.79.
Looking ahead, investors will also prepare for the release of European economic growth figures on Wednesday. They are expected to show economic activity in the 17-nation eurozone contracting in the fourth quarter, leaving the region with one foot in recession — the bloc is widely expected to have shrunk again in the first quarter. Those figures will not be available until the spring.
In Asia, Hong Kong's Hang Seng gained 0.5 percent to 20,887.40 and South Korea's Kospi added 0.6 percent to 2,005.74.
In mainland China, the benchmark Shanghai Composite Index ended virtually unchanged at 2,351.86 while the Shenzhen Composite Index gained 1 percent to 912.31. Benchmarks in Taiwan, Singapore and Indonesia also rose.
Chinese property shares plummeted after the city of Wuhu in eastern China, announced it was suspending plans it announced last week to subsidize some home purchases and give tax breaks to help support the local market.
That news, suggesting an easing of curbs on the real estate market, pushed property and related shares higher late last week.
State-run newspapers carried prominent coverage Monday of comments by Premier Wen Jiabao reaffirming the central government's determination to keep curbs on the real estate market to prevent a resurgence of the property speculation that helped drive prices to levels unaffordable for most Chinese families.
Benchmark crude for March delivery was up $1.42 at $100.10 in electronic trading on the New York Mercantile Exchange. The contract fell $1.17 to settle at $98.67 on the Nymex on Friday.
In currency trading, the euro was up to $1.3198 from $1.3170 late Friday in New York. The dollar was relatively flat at 77.50 yen.
Pamela Sampson in Bangkok and Elaine Kurtenbach in Shanghai contributed to this report.