Wednesday, June 30, 2010

Chaos erupts in Greece over austerity measures

Police fire tear gas and stun grenades to disperse masked protesters

ATHENS, Greece — Dozens of masked youths clashed with police at a union protest Tuesday in Athens during the country's fifth general strike this year against the cash-strapped government's planned pension and labor reforms.

Riot police fired tear gas and stun grenades to disperse troublemakers who threw chunks of marble smashed off metro station entrances and set rubbish bins on fire. Running clashes continued along a major avenue — lined with shuttered shops and banks — as rioters armed with wooden clubs made repeated sallies against police.

Seven policemen were injured in the clashes, and 13 demonstrators were detained, six of whom were arrested, police said. Riot police chased demonstrators into a main subway station, and an AP photographer saw police detain one young man in a subway car, spraying him with pepper spray.

Demonstrators smashed bus stops and phone booths, and broke windows at three shops and two bank branches. The demonstration ended after a few hours, and rioters melted away toward the central Exarcheia district — a traditional anarchist hangout.

However, Tuesday's clashes were far more muted than the riots that erupted during a previous general strike on May 5, when three people died after becoming trapped in a bank torched by rioters.

Businesses shut down, tourists exasperated

In response to the Tuesday protests, local media were shut, hospitals operated with emergency staff and public offices were mostly closed.

Businesses in central Athens rolled down their metal shutters but many elsewhere were open as usual.

"We have again taken to the streets. we are striking we are resisting the slaughtering of our rights," said Ilias Vrettakos, a vice president of the main public sector union.

Some tourists, a sector accounting for almost a fifth of Greece's GDP, were exasperated by the cancellation of some ferries to islands. About 60 domestic flights were also cancelled but international flights were unaffected.

Issues behind the Greece protests
The socialist government, which has 157 seats of 300 in parliament, was to begin preliminary consideration of an overhaul of pensions later on Tuesday. It will raise women's retirement age from 60 to match men on 65 and demand more years at work to qualify for a pension.

The government says the reforms of the creaking system are essential to stave off bankruptcy for Greece, where debt has reached 133 percent of GDP in 2010.

Participation in protests has waned, however, partly as Athenians escape to the islands for summer holidays. Unions representing about 2.5 million workers, half the workforce, back the strike.

On the big May 5 protest, three people were killed in the fire-bombing of an Athens bank. About 25,000 people turned out for the last similar strike on May 20.

The repeated strikes, protests that have sometimes turned violent and a rise in small bomb attacks since riots in 2008 have hurt tourism, which accounts for nearly a fifth of Greece's 240 billion euro ($297 billion) economy. A senior official was killed last week by a booby-trapped bomb.

But economists said the strike was far from shutting down the economy and that it was hard to estimate the drain on GDP.

"My sense is that there is so much waste in the public sector, and it's essentially public employees on strike, that I don't see much effect," said Gikas Hardouvelis, chief economist at Eurobank EFG Group.

Concurrent strikes in Spain
Meantime, Spanish workers shut down the Madrid metro system in anger at a 5 percent public sector pay cut.

The strikes in both Spain and Greece on Tuesday highlight widespread resistance to Europe-wide austerity measures as the euro and shares tumbled ahead of a deadline for banks to repay a giant European Central Bank cash injection.

Spanish Economy Minister Elena Salgado said she hoped the European Central Bank was aware of the situation of her country's stressed banks, some of which have been shut out of inter-bank lending due to worries over bad debts and public finances.

"The ECB says it doesn't like governments to tell it what to do. I simply say I hope that in this occasion, as in others, the ECB will be aware of the needs of the Spanish financial system," Salgado told Spanish radio.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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