Greece adopts austerity, street battles turn ugly

30th June 2011, Comments 0 comments

Greek lawmakers have backed a stinging new austerity plan demanded by international creditors, sparking frenzied battles between masked rioters and police firing tear gas late into the night.

Lawmakers voted 155 to 138 for the hotly-disputed package on Wednesday to slash 28.4 billion euros ($40 billion) from the balance of government spending by 2015, a plan aimed at unlocking emergency finance from the EU and the IMF.

An estimated 500 to 600 hardcore youths hurled missiles, according to police, who responded with volleys of tear gas that blanketed Syntagma Square in front of the parliament and reached high floors in surrounding buildings.

Security forces drove protesters further away from the parliament, but a blaze broke out at the finance ministry on the far side of the square amid early evening running battles.

"We're going to carry on the protest until the government falls, and it will fall," 22-year-old student Thanas told AFP.

Debbi, also 22, spoke of "chaos."

"We'll stay whatever happens though, we're going to fight to take back the square," the student added.

European Union leaders, including German Chancellor Angela Merkel, hailed the parliament's endorsement for the austerity measures, even though a second vote on the details behind the measures must still be held on Thursday.

The euro firmed and Greek stocks again rose as EU president Herman Van Rompuy applauded a "vote of national responsibility."

The yes vote was "the only way to buy time and start the great changes this country needs," said Prime Minister George Papandreou, pledging to do "everything to avoid the collapse of this country" and prevent default on its 350-billion-euro debt.

The plan is a condition for 12 billion euros of emergency loans needed by mid-July from stressed eurozone partners and the International Monetary Fund that could now be unlocked by eurozone finance ministers as early as their next meeting on Sunday.

Eurozone chief Jean-Claude Juncker urged another yes vote on Thursday "in these grave and crucial times for Greece" as MPs began their debate on the "implementation" of radical reforms.

Five lawmakers voted "present" -- a political statement indicating they could back the second vote if the majority gets squeezed.

"We have taken a big step," Finance Minister Evangelos Venizelos told the Athens News Agency. "Tomorrow, we will take the second so that I can go on Sunday to see my Eurogroup partners with real proof of the country's credibility."

The aim in privatising a dozen utilities and other public assets is to raise 50 billion euros by 2015, but the sale of the state's majority holding in the national electricity company is a particularly divisive element in the detail.

The Health Ministry said around 100 demonstrators and 31 officers had received hospital treatment for breathing troubles and head injuries, though no one had been seriously wounded. Police said they had made 11 arrests.

Amid rioters' accusations of police provocation, Finance Minister Venizelos told parliament he would look into the situation but slammed the violence against the post office and banks as "appalling."

Protesters erected makeshift barriers on the square, hurling firecrackers, rocks and metal barriers at security forces, before more tear gas sent them scuttling down metro steps, those without masks struggling to breathe or see.

On the second day of a 48-hour general strike, many protesters had said they expected the cocktail of taxes, spending cuts and sell-offs deemed essential for wider eurozone stability to pass -- but that they would be back.

The general strike brought about power cuts and ground transport in the capital to a halt.

Once the July cashflow needs are met, a second bailout expected to be worth a similar amount to last year's 110-billion-euro rescue can be thrashed out.

The main sticking point involves how much banks and other private creditors will contribute by way of a "rollover" of existing debts.

European Central Bank executive board member Lorenzo Bini Smaghi sounded a note of caution about "unprecedented masochism that would cause investors to flee," and added that "European taxpayers risk ending up paying even more.

"No other industrialised nation has had its debt restructured in the last 60 years," he said in an interview to French newspaper Les Echos, warning of "great instability."

Several dozen activists from Spain's "indignant" movement against economic suffering meanwhile held a night-time rally outside the Greek embassy in Madrid to show solidarity with protesters in Greece.

They also organized a spontaneous sit-down protest outside the embassy and read aloud a protest declaration saying: "Our parliaments have been captured by the dictatorship of the markets."

© 2011 AFP

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