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Greece Hit by Violent Protests |
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Friday, 05 March 2010 |
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Greek police clashed with demonstrators protesting sweeping budget cuts Friday as the government sought support from Germany to help it avoid default, only to be told by Germany's Finance Minister not to expect a single cent.
Police fired tear gas after a union leader was struck and hurt by youths, an AFP reporter on the scene said, during protests against sweeping new budget and spending cuts announced Wednesday.
The violence erupted as Greek Prime Minister George Papandreou was to meet German Chancellor Angela Merkel later Friday, with Germany critical to any eurozone effort to help Greece restore its market credibility and already signalling it was not prepared to offer financial assistance.
Parliament meanwhile approved the budget and spending cuts worth 4.8 billion euros (6.5 billion dollars) announced by Papandreou on Wednesday as he sought to secure EU backing.
Papandreou told Germany's Frankfurter Allgemeine newspaper he was "not asking for money" but other forms of support.
Greek aid "unnecessary"
"We need support from the European Union and our partners to obtain credit on the markets at better conditions. If we do not receive this aid, we will not be able to enact the changes we foresee."
But speaking ahead of the Merkel-Papandreou talks, Germany's Economy Minister Rainer Bruederle said Berlin would not provide Greece with "one cent."
"Papandreou said that he didn't want one cent -- in any case the German government will not give one cent," Bruederle told reporters.
Luxembourg's Jean-Claude Juncker, who acts as the formal head in finance matters for the 16 nations that share euro, said he believed the Greek measures meant that Athens would not now need EU aid.
Greeks, Germans meet over finanical crisis
"The commitments taken by the Greek government are clearly paving the way towards an exit" from its debt and deficit crisis, Juncker said.
Juncker reiterated the agreed line among European Union leaders that they "stand ready to take coordinated and determined action if necessary (but) ... I don't think this action will be needed."
Europe's biggest economy, Germany is widely seen as the most likely candidate to help prevent a Greek default, which would be disastrous for the 16-nation eurozone.
But there is huge opposition in Germany against such a move, with angry editorials slamming alleged Greek corruption and wasteful spending and Merkel allies even suggesting Greece should sell some of its islands to free up cash.
There was also anger aplenty on the streets of Athens Friday.
Several thousand Communist protesters demonstrated in front of parliament as it voted on the latest austerity package.
"We say no to anti-popular measures, to taxes and allowance cuts," a Communist banner said.
Greece's two main unions brought traffic to a standstill with a public sector strike. No public transport ran in Athens in the morning, all Greek airports were to close for a four-hour period and giant traffic jams clogged the centre of the capital.
State hospitals ran on skeleton staff, while teachers, state and private media groups were also hit by the strike. Even the police union called on its members to join protests organised for the day.
Addressing parliament, Finance Minister George Papaconstantinou said the state was paying 26 billion euros in civil servant salaries, up 50 percent in the last five years.
"Where did this money go? Each and every minister would give benefits to whomever they wanted," Papaconstantinou said.
The government on Wednesday increased sales, tobacco and alcohol taxes and cut public sector holiday allowances. Pensions were also frozen in a package worth the equivalent of around two percent of gross domestic product (GDP).
Athens has promised the European Union that it will reduce its public deficit this year by four percentage points from 12.7 percent.
Merkel has welcomed the Greek package as "an important step" towards cutting its budget deficit and restoring trust in Athens and the euro.
Needing to borrow money urgently to pay its bills, Greece successfully raised an urgently needed 5.0 billion euros (6.8 billion dollars) via a bond issue on Thursday.
But it had to pay an interest rate of some 6.3 percent or about twice the rate at which Germany can borrow.
Greece's borrowing costs shot up late last year when it was hit with a triple downgrade by credit agencies after revealing that its official budget deficit figures had been grossly under-reported.
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