Police use tear gas against Greek protestors

[May 05, 2010]  ATHENS, Greece (AP) -- Police used stun grenades and tear gas in clashes with protestors Wednesday as tens of thousands of outraged Greeks took to the streets against harsh new spending cuts aimed at saving their country from bankruptcy.

Running street battles broke out in the Greek capital, where demonstrators chanting "thieves, thieves" attempted to break through a riot police cordon guarding Parliament and chased the ceremonial guards away from the Tomb of the Unknown Soldier in front of the building.

The demonstrations in Athens were some of the largest in recent years, with some estimates putting the crowd at about 60,000 people. Government officials put the number at above 25,000. Violence also broke out in the northern city of Thessaloniki, where another 20,000 people marched through the city center, with youths smashing windows of stores and fast food restaurants.

The marches came amid a 24-hour nationwide general strike that grounded all flights to and from Greece, shut down ports, schools and government services and left hospitals working with emergency medical staff. The Acropolis and all other ancient sites were closed, while journalists also walked off the job, suspending television and radio news broadcasts.

Prime Minister George Papandreou on Sunday announced draconian austerity measures, including cuts in salaries and pensions for civil servants, and another round of consumer tax increases, to pull his heavily indebted country away from the brink of default.

Union reaction until now had been relatively muted by Greece's volatile standards, although the country has been hit by a series of strikes. The opposition conservatives - whom Papandreou's Socialists have blamed for mismanaging the economy and fudging statistics during their five years in power - trail the Socialists by 10 percentage points in recent opinion polls.

But anger has mounted after the announcement of new austerity measures, which were essential to unlock a euro110 billion rescue package in loans from other eurozone countries and the International Monetary Fund.

In Germany, Chancellor Angela Merkel urged parliament to quickly pass the country's share of the loans, aimed at keeping Greece from default and at preventing Athens' debt crisis from becoming a wider crisis for the euro by engulfing other financially troubled countries such as Spain and Portugal.

Skepticism that the plan would accomplish that goal of preventing market contagion sent the euro below $1.30 for the first time in over a year.

Germany, as Europe's largest economy, will provide euro8.4 billion in 2010 and up to euro14 billion more over 2011 and 2012 according to the plan.

"Nothing less than the future of Europe, and with that the future of Germany in Europe, is at stake," Merkel told lawmakers. "We are at a fork in the road."

Greek unions concede that the cash-strapped government was forced to increase consumer taxes and slash spending, including cutting salaries and pensions for civil servants, to secure a vital euro110 billion ($144 billion) three-year loan package from European partners and the International Monetary Fund.

But they say low-income Greeks will suffer disproportionately from the measures, which aim to save euro30 billion ($40 billion) - the country's current budget deficit -- through 2012.

"These people are losing their rights, they are losing their future," said Yiannis Panagopoulos, head of GSEE, one of the two largest union organizations. "The country cannot surrender without a fight."

Markets have been far from assured that the package will douse Europe's smoldering sovereign debt crisis, which many fear could spread to other financially troubled eurozone countries such as Portugal and Spain.

IMF head Dominique Strauss-Kahn warned that the crisis could spread to other countries despite the rescue package's efforts to contain it.

"Everyone must remain extremely vigilant," to this risk, Strauss-Kahn said in an interview published in French newspaper Le Parisien Wednesday.

He said Greek anger at the harsh spending cuts was understandable.

"I completely understand the Greek populations' anger, its incomprehension at the size of the economic catastrophe," Strauss-Kahn said. But Greeks must also understand that without these measures, "the situation would be infinitely more serious," he said.

But those who are feeling the crunch are outraged that they have to pay for what they see as politicians' mismanagement of their country's economy.

"We'll be on the streets every day, every day! You never win unless you fight," said 76-year-old Constantinos Doganis, who gets euro345 a month from his farming pension fund.

"It's our fault too, all the mistakes made by politicians over 30 years, all the people who cheat on their taxes," he said. "But they are behaving like buzzards - the Germans borrow money at 3 percent and then lend it to us for 5. Why?"

Despite the strike, the draft bill of the new austerity measures were to be discussed at committee level in Parliament Wednesday afternoon, and are to be voted on Thursday. Prime Minister George Papandreou's Socialists hold a comfortable majority of 160 in the 300-seat Parliament, and with a simple majority of 151 votes needed, the bill is expected to be passed easily.

[Associated Press; By DEREK GATOPOULOS]

Associated Press writers Elena Becatoros in Athens, Greg Keller in Paris and APTN crews in Athens contributed.

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