Greek Anti-Austerity Protesters Cash With Police

June 15, 2011 - 7:59 AM

Greece Financial Crisis

Protesters holding Greek flags face the police in front of the Parliament during a rally against plans for new austerity measures, in central Athens, Wednesday, June 15, 2011. A 24-hour anti-austerity strike by Greece's largest labor unions crippled public services Wednesday, as the Socialist government was to begin a legislative battle to push through last-ditch cost-cutting reforms that will extend beyond its own term in office. (AP Photo/Lefteris Pitarakis)

ATHENS, Greece (AP) — Greek police fired tear gas at groups of youths hurling firebombs on the edge of an anti-austerity rally outside Parliament, where the struggling government on Wednesday was to seek support for new cutbacks to avoid a default that would be disastrous for financial markets.

Riot police had set up a massive security operation in the center of the capital to keep protesters from blockading the Parliament building, where lawmakers were to discuss a new austerity package that will impose tax hikes and spending cuts to 2015.

The protests are the epicenter of a crisis that could end in a disastrous default that would threaten the future of the eurozone and shake financial markets just as the global economy struggles to recover.

Wednesday's violence adds public pressure on the government at a time when Prime Minister George Papandreou also faces an internal party rebellion from within his governing Socialists over the new austerity. But the new bill must be passed if Greece is to continue tapping its rescue loans.

The stakes are high and the results uncertain — a defection by a Socialist deputy Tuesday night has left Papandreou with a majority of just five in the 300-person Parliament. Another Socialist lawmaker said he will vote against the bill, which is set for final approval by early next month.

If Greece is denied continue rescue funding, it will default on its debts, likely setting off a financial chain reaction that experts have described as catastrophic.

In Athens, the images were not reassuring. Running clashes broke out between rock-wielding youths and riot police, who made heavy use of tear gas that wafted through Syntagma Square.

Many who had been participating in a previously peaceful rally of more than 25,000 people began to disperse to avoid the clouds of choking gas. Cafe tables and chairs lay scattered as trash bins burned and a curtain of gas blanketed the square.

The protests in Athens and in the northern city of Thessaloniki, where another 20,000 people rallied peacefully, were part of a 24-hour general strike, the result of months of growing frustration over the country's slide.

A large part of central Athens was closed to all traffic and pedestrians as police erected barricades to allow lawmakers access to Parliament by car. Some 5,000 officers, including hundreds of riot and motorcycle police, used parked buses and crowd barriers to prevent protesters from encircling the building.

The scuffles broke out as Prime Minister George Papandreou met with the country's president, Karolos Papoulias, in the nearby presidential mansion to brief him on the severity of the situation.About a hundred people booed and heckled as cars carrying the two swept past.

Papandreou has faced an internal party revolt over the new austerity package from within the governing Socialists, with one of his deputies defecting Tuesday night, reducing Papandreou's parliamentary majority to five in the legislature. Another Socialist lawmaker said he will vote against the bill, which is set for final approval by early next month.

"A national effort is required. Because we are at a historically crucial moment and a time of crucial decisions," Papandreou told Papoulias, adding that he was still in contact with opposition party leaders in an effort to garner cross-party support for the austerity drive.

"But on the other hand, everyone has to assume their responsibilities," he said, according to a transcript of their conversation released by the prime minister's office. "In any case, we will move forward with this sense of responsibility and the necessary decisions" to pull Greece out of the crisis.

The statements calmed concern, voiced mainly in the local media, that the prime minister might have been considering calling early elections.

"Resign, resign," the crowd chanted outside Parliament. The protesters included both young and old, and many brought their children, hoisting them onto their shoulders to shield them from the crush.

Two separate marches organized by trade unions joined the rally in Syntagma. Such demonstrations have turned violent in the past — three clerks died when rioters torched their bank in Athens last May.

The latest austerity drive has brought many people onto the streets for the first time.

"What can we do? We have to fight, for our children and for us," said Dimitra Nteli, a nurse at a state hospital who was at the protest with her daughter. "After 25 years of work I earn 1,100 euros a month. Now that will drop to 900. How can we live on that?"

Her 26-year-old daughter, Christina, said the situation in Greece had led her to leave for the U.K. to study conflict resolution.

"I have no job here. There are no prospects," she said.

Police spokesman Athanassios Kokalakis said about 20 protesters were briefly detained in another part of the center as they tried to prevent cars carrying lawmakers from accessing Parliament.

The general strike crippled public services across the country, leaving state hospitals running on emergency staff, disrupting port traffic and public transport, and forcing radio and television news programs off the air during the morning. Journalists' unions called off their strike to cover developments in Athens.

The government needs to pass the 2012-2015 austerity program worth euro28 billion ($40.5 billion) this month — or face being cut off from its bailout loans.

The Socialists' popularity plummeted in recent weeks over the new austerity plan. A weekend opinion poll gave the main opposition conservatives a four-point lead over their Socialist rivals, the first time the party has been ahead in surveys since 2009. The next general election is scheduled for October 2013.

With its credit rating deep in junk status, Greece is being kept afloat by the EU and IMF bailout, but will need additional support to cover financing gaps next year as high interest rates will prevent it from tapping the bond market next year, contrary to what the original bailout agreement had predicted.

On Monday night, Standard & Poor's slashed Greece's rating from B to CCC, dropping it to the very bottom of the 131 states that have a sovereign debt rating. That suggests Greece's creditors are less likely to get their money back than those of Pakistan, Ecuador or Jamaica. On Tuesday, the agency also cut its rating for four Greek banks to CCC from B.

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Derek Gatopoulos, Petros Giannakouris and Lefteris Pitarakis in Athens contributed.