Greek police clash with austerity protesters

Greek police fired teargas and battled groups of hooded youths near parliament on Tuesday in a rally against anti-austerity measures international lenders have demanded to stave off national bankruptcy.

Parliament is due to vote this week on a package of spending cuts, tax increases and privatizations agreed as part of a massive bailout aimed at averting the euro zone's first debt default.

Labor unions launched a 48-hour strike to protest the measures and more than 5,000 police were deployed to the center of the capital to deal with the protests, with most attention focused on Syntagma Square in front of the parliament.

The rally was initially peaceful but by early afternoon, hundreds of youths, many wearing gasmasks and scarves covering their faces, hurled masonry chipped off buildings in the square at riot police who responded with tear gas.

Officials said four police officers were injured by flying stones and one person was stabbed during fights between rival groups of young demonstrators and three others were injured while a number of people were treated with breathing troubles.

Eighteen people were detained and three formal arrest charges were laid, police said.

Violence continued throughout the afternoon and protesters set fire to two communications trucks with mobile telecoms transmitters which they had apparently mistaken for TV trucks and sprayed with slogans attacking the media and banks.

As a crowd initially estimated at more than 20,000 thinned out, clouds of white smoke swirled above the square and police with shields and riot helmets stood by, occasionally launching charges to disperse a harder core of mainly young demonstrators.

Transport, schools and other services as well as many private businesses were shut as a result of the strike called by ADEDY, the union representing half a million civil servants and GSEE, which represents 2 million private sector workers.

Earlier, protesters had marched through the capital chanting slogans, banging drums and carrying banners attacking the terms of the bailout which many Greeks feel imposes harsh penalties on ordinary pensioners and workers while sparing the rich.

"The measures are for the good of the banks not for the good of workers," said Yannis Tsounis, 38, a municipal worker. "Europe must not see us as pariahs. We are beginning to feel as not being a part of Europe."

Deep in Debt

Greece is in the grip of its worst recession since the 1970s, with youth unemployment at more than 40 percent and public finances shattered by a debt equivalent to some 150 percent of annual economic output.

Deep in deficit and unable to borrow on financial markets, it depends on international support to keep going. A default would spread contagion around the 17-nation single currency area and cause a deep shock to the global economy.

Finance Minister Evangelos Venizelos called on lawmakers to back the measures in two votes on Wednesday and Thursday, saying it was vital to convince Greece's creditors that it had a plan and that the austerity measures could be implemented.

"The government is running out of time and so is the opposition," he told parliament. "We are handling our country's history right now and nobody can play with that."

The European Union's top economic official, Olli Rehn, issued a stark warning to Greek lawmakers that if they did not vote for the measures, the result would be immediate default.

Voting on the first bill is due after a debate that is due to begin at 10 a.m. (0700 GMT) on Wednesday. Parliamentary officials said the timing of the vote itself was still unclear but would probably come some time in the afternoon.

The conservative opposition has refused to back the plan but although the socialists have a majority, with 155 deputies in the 300-seat house, the final outcome is unclear. Some rebels from the ruling PASOK party oppose the deal but a handful of conservatives are expected to back it.

More Hurdles Ahead

More serious problems may lie ahead however when the government has to implement the program, which will slash public sector jobs, shut down state-owned companies and attempt to take on endemic tax evasion.

Euro zone authorities are working flat out with banks and insurers to devise a scheme under which private bondholders can share the burden of further funding for Greece without prompting credit ratings agencies to declare a selective default.

European policymakers are also quietly exploring contingency plans to keep Greece afloat with emergency liquidity if parliament were to reject all or part of the package, three euro zone sources told Reuters on Monday.

The austerity plan has caused deep anger among Greeks disillusioned with years of political corruption and inefficiency and now bitterly resentful of the tough conditions imposed by the European Union and International Monetary Fund.

"They cut our pay by 25 percent and a lot of people in my department have not been paid for two months," said 52 year-old civil servant Yannis Zaharopoulos.

"We have gotten to the point where families cannot make it. We are financially and psychologically wrecked."

In a sign the discontent has spread well beyond the union movement and far left, the Greek Confederation of Commerce (ESEE), a trade association of retailers, also rejected measures its leader Vassilis Korkidis denounced as "predatory."

It urged shopkeepers to raise Greek national flags at their stores and announced an internet campaign to convince cabinet members and MPs to renege on the austerity plan.

But in a speech to shareholders in Athens, the head of EFG Eurobank, Greece's second-largest bank, said it was vital that the austerity measures were passed in parliament.

"Today, what is at stake for the country is its very future. Individually and collectively, we must all realize how crucial the situation is and join the collective effort for the big changes," Nicholas Nanopoulos said.

[Source: By Renee Maltezou and Harry Papachristou, Reuters, Athens, 28Jun11]

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