Greek anti-austerity protesters clash with police

June 15, 2011 - 9:58 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) — Hundreds of protesters clashed with riot police in central Athens Wednesday as a major anti-austerity rally degenerated into violence outside Parliament, where the struggling government was to seek support for new cutbacks to avoid a disastrous default.

Tear gas blanketed the capital's main Syntagma Square, where more than 25,000 people had gathered to protest a new package of tax hikes and spending cuts through 2015.

A few hundred youths smashed the windows of a luxury hotel on the square, ripped up paving stones to throw at police and hurled firebombs at cordons of riot police. Demonstrators said at least 10 people were injured, and they appealed to fellow protesters to stay calm and allow ambulances through.

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 a party rebellion from within his governing Socialists over the new austerity. One of his deputies defected Tuesday, reducing Papandreou's parliamentary majority to five. Another Socialist lawmaker said he will vote against the bill, which is set for final approval by early next month.

But the new bill, worth euro28 billion ($40.5 billion) must be passed this month if Greece is to continue tapping its rescue loans.

The stakes are high and the results uncertain — if Greece is cut off from its rescue funding, it will default on its debts, likely setting off a financial chain reaction that experts have described as catastrophic.

In Athens, sporadic clashes on the fringes of the rally gradually spread, scattering those in the previously peaceful rally. Cafe tables and chairs lay overturned as trash bins burned. Heavy clouds of tear gas hung over Syntagma Square and side streets. The choking chemicals wafted as far as the presidential mansion behind Parliament, where Papandreou met with the country's president, Karolos Papoulias, to brief him on the severity of the situation.

Papandreou later spoke by telephone with the heads of opposition parties to seek support for the austerity package. The EU has been pressing for cross-party support, but main opposition Conservative party leader Antonis Samaras has insisted the bailout agreement must be re-negotiated instead.

Police had set up a massive security operation to ensure protesters could not carry out a pledge to prevent lawmakers from accessing Parliament. Some 5,000 officers, including hundreds of riot and motorcycle police, used parked buses and crowd barriers to prevent protesters from encircling the building, while a large part of central Athens was closed to all traffic.

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 national effort is required. Because we are at a historically crucial moment and a time of crucial decisions," Papandreou told Papoulias, according to a transcript of their conversation released by the prime minister's office.

"But on the other hand, everyone has to assume their responsibilities," he said. "In any case, we will move forward with this sense of responsibility and the necessary decisions" to pull Greece out of the crisis.

In Syntagma Square, however, the mood was defiant.

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

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 Britain 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.

The general strike crippled public services across the country, leaving state hospitals running on emergency staff, disrupting port traffic and public transport.

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 keep it out of the bond market, contrary to what the original bailout agreement had predicted.

On Monday, 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.

____

Derek Gatopoulos in Athens contributed to this report.