Greek anti-austerity protests turn ugly

Elena Becatoros and Menelaos Hadjicostis

Youths hurled rocks and fire bombs at riot police in central Athens on Tuesday as a general strike against new austerity measures brought the country to a standstill. Lawmakers are embarking on their second day of debate on austerity measures that must be passed in votes on Wednesday and Thursday if Greece is to receive another batch of bailout funds to see it beyond the middle of next month. If the votes don't pass, Greece could become the first euro zone nation to default on its debts, and that could send out huge shock waves through the global economy.  The new austerity drive is proving hugely unpopular in Greece and another demonstration in central Athens soon descended into violence. For several hours, police fired volleys of tear gas and stun grenades at masked and hooded youths just before the second day of debating was to resume. Police said 18 people were detained, with five of them later arrested, while four policemen were injured and transferred to a military hospital.

The clashes came at the start of a two-day strike called by unions furious that the new €28-billion ($40-billion U.S.) austerity program will slap taxes on minimum wage earners and other struggling Greeks. The measures come on top of other spending cuts and tax hikes that have sent Greek unemployment soaring to over 16 per cent.

“The situation that the workers are going through is tragic and we are near poverty levels,” said Spyros Linardopoulos, a protester with the PAME union blockading the port of Piraeus. “The government has declared war and to this war we will answer back with war.”

A peaceful demonstration of 20,000 people in Athens was soon marred by outbreaks of violence, when two groups clashed. One side took refuge near a coffee shop, and police fired tear gas in an attempt to clear the crowds and get them out.

The situation quickly degenerated, with masked and hooded youths pelting police with chunks of marble ripped off building facades and steps. They set fire to giant parasols at an outdoor cafe, using some to form barricades, and smashed windows of a McDonalds outlet and other snack shops.

Staff at upscale hotels handed out surgical masks to tourists and helped them with rolling luggage past the rioting, over ground strewn with smashed-up marble and cement paving stones.

Youths torched a satellite truck parked near parliament. The fire caused a freezer at a neighbouring kiosk to explode, and hooded youths ducked behind the burning truck to help themselves to ice-cream cones.

“The trouble makers are attacking the police fiercely and trying to disrupt a peaceful protest,” police spokesman Athanasios Kokalakis said.

The scale of the strike bought large parts of the Greek economy to a halt. Everyone from doctors and ambulance drivers to casino workers and even actors at a state-funded theatre were joining the strike or holding work stoppages for several hours.

A continuing strike by electricity company workers kept up rolling blackouts across Greece. Not far from the violent protest, cafés and ice cream vendors popular with tourists used portable generators to keep the power on.

Hundreds of flights were cancelled or rescheduled as air traffic controllers walked off the job for four hours in the morning. Another walkout is scheduled for later. Strikes by public transport workers snarled traffic across the capital and left tourists stranded around Piraeus.

Many Greeks insist they should not be forced to pay for a crisis they believe politicians are responsible for.

“We don't owe any money, it's the others who stole it,” said 69-year-old demonstrator Antonis Vrahas. “We're resisting for a better society for the sake of our children and grandchildren.”

Despite the discontent being displayed — a sizable but peaceful demonstration was held in Greece's second city Thessaloniki — the country's lawmakers are preparing for their second day of debate over the austerity measures. The package must be passed so the European Union and the International Monetary Fund release the next instalment of Greece's €110-billion bailout loan.

Without that €12-billion instalment, Greece faces the prospect of a default next month — a potentially disastrous event that could drag down European banks and hurt other financially troubled European countries.

But even lawmakers from the governing Socialists have been upset over the latest measures and Prime Minister George Papandreou has struggled to contain an internal party revolt. He reshuffled his cabinet earlier this month to try to ensure his party's support for this vote, but the Socialists still only have a five-seat majority in the 300-member Parliament.

Mr. Papandreou urged lawmakers Monday to fulfill a “patriotic duty” by voting in favour of the new measures, but two of his own lawmakers have suggested they won't.

European officials have also been pressuring Greece's the main conservative opposition party to back the austerity bill but so far their urgings have failed to convince conservative party leader Antonis Samaras.

“I trust that the Greek political leaders are fully aware of the responsibility that lies on their shoulders to avoid default,” European Monetary Affairs Commissioner Olli Rehn said.

As well as looking to get the next batch of bailout funds, Greece looks like it will need another financial rescue.

The initial plan had assumed that Greece would be able to return to the markets next year.

That doesn't look like it's going to happen so Greece is looking for more money. Mr. Papandreou has said a second bailout would be roughly the same size as the first and hopefully on better terms.

“I call on Europe, for its part, to give Greece the time and the terms it needs to really pay off its debt, without strangling growth, and without strangling its citizens,” he said.

Even with the new austerity measures and a second bailout, many investors still think Greece is heading for some sort of default because its overall €340-billion debt burden is too great.