Greeks clean up after riots against austerity vote

[February 13, 2012]  ATHENS, Greece (AP) -- Firefighters doused smoldering buildings and cleanup crews swept rubble from the streets of central Athens on Monday following a night of rioting during which lawmakers approved harsh new austerity measures demanded by bailout creditors to save the nation from bankruptcy.

At least 45 buildings were burned, including one of the capital's oldest cinemas, while dozens of stores and cafes were smashed and looted.

The stench of tear gas still hung in the air on Monday morning, choking passers-by. More than 120 people were hurt in the rioting which also broke out in other Greek cities. Authorities said 68 police needed medical care after being injured by gasoline bombs, rocks and other objects hurled at them, while at least 70 protesters were also hospitalized.

Police arrested at least 67 people, while in several cases they had to escort fire crews to burning buildings after protesters prevented access.

The rioting began Sunday afternoon ahead of a landmark vote in Parliament on yet more austerity measures. The drastic cuts debated in parliament include axing one in five civil service jobs over the next three years and slashing the minimum wage by more than a fifth.

Lawmakers approved the bill in a 199-74 vote -- to the relief of investors who pushed the Athens stock index up 5 percent on Monday.

The vote paves the way for Greece's international creditors to release euro130 billion ($172 billion) in new rescue loans to prevent the country from a potentially catastrophic default next month -- bankruptcy could push Greece out of Europe's euro currency union, drag down other troubled eurozone countries and further roil global markets.

There was nevertheless strong dissent over the austerity package among the majority Socialists and rival Conservatives who make up Greece's interim coalition government. The parties disciplined the dissenters in their ranks, with the Socialists and Conservatives expelling 22 and 21 lawmakers respectively, reducing their majority in the 300-member parliament from 236 to 193.

Germany gave the vote result a cautious welcome, with Foreign Minister Guido Westerwelle describing it as "a first significant step along the right road."

"However, the actual difficult work with implementing the reforms that have been agreed on is only just starting now," he said in a statement. "That is the decisive precondition for Germany and the other euro partners being able to stand by Greece with a further rescue package."

"Embarking on implementation is decisive now," Westerwelle said.

"These decisions show the will and readiness of the Greeks to make great efforts of their own ... to put the country on the right track," German Chancellor Angela Merkel's spokesman, Steffen Seibert, said in Berlin.

"These measures, and we really have to note this, are not just saving for the sake of saving, they are not cutting for the sake of cutting -- this is about reforms in every political area," he said. "These are measures that are meant to restore step by step the financial room for maneuver that the country needs for new jobs and new growth to emerge."

Germany's vice chancellor, Philipp Roesler, also said the vote was "a step in the right direction."

"It is good that the legislation has now been approved, with a broad majority too, but what is decisive is the implementation of structural reforms," Roesler, who is also Germany's economy minister, told ARD television.

"The legislative process is one thing, implementation is another -- I would like to recall again that there have been tax laws for a long time and the fact that they were not adhered to sensibly is part of the problem," he added.

Roesler noted that the upcoming report by Greece's international debt inspectors from the European Commission, European Central Bank and International Monetary Fund, known as the "troika," will be key to determining whether the measures Athens has taken suffice to allow the country to carry its debts and get further aid.

"The pressure that Germany built up in Europe was right in order at least to move Greece further in this right direction," he said.

Sunday's clashes erupted after more than 100,000 protesters marched to the parliament to rally against the drastic cuts.

"There's no question that there's quite a lot of anger in the population. There is quite a lot of frustration," said social and economic analyst Panos Tsakloglou. "However I do not think that these rioters represent all these demonstrators that were mostly peaceful yesterday."

The new bailout deal, which has not yet been finalized, will be combined with a massive bond swap deal to write off half the country's privately held debt, reducing Greece's debt load by about euro100 billion.

But for both deals to materialize, Greece has to persuade its deeply skeptical creditors that it has the will to implement spending cuts and public sector reforms that will end years of fiscal profligacy and tame gaping budget deficits.

Eurozone finance ministers are to meet on Wednesday to approve the plan, after refusing to do so during a meeting last week, saying Athens had to first approve the new austerity measures.

Before signing off on the bailout, the eurozone ministers will still want Greek political leaders to commit in writing to uphold the austerity plan even after the general election in April.

Finance Minister Evangelos Venizelos insisted the country's economic survival hinged on the passage of the new measures.

"The question is not whether some salaries and pensions will be curtailed, but whether we will be able to pay even these reduced wages and pensions," he said in Parliament before the vote. "When you have to choose between bad and worse, you will pick what is bad to avoid what is worse."

The further cuts come after two years of deep spending cuts and repeated tax hikes that have sent unemployment soaring to more than 20 percent and left the country struggling through a fifth year of recession.

Those measures were taken in return for a first, euro110 billion ($145 billion) package of rescue loans from other eurozone countries and the International Monetary Fund, but despite the cutbacks, Greece repeatedly failed to meet its fiscal targets in reducing its debt and deficit and increasing economic competitiveness.

[Associated Press; By ELENA BECATOROS]

Geir Moulson in Berlin and AP Television in Athens contributed.

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