Video: Anger erupts on Athens’ streets

msnbc.com news services
updated 6/28/2011 4:45:58 PM ET 2011-06-28T20:45:58

A general strike disrupted services across Greece and riots erupted once more outside Parliament Tuesday as demonstrators protested tax increases and spending cuts essential for the country to receive critical bailout funds that will prevent a potentially disastrous default.

Inside Parliament, lawmakers debated new austerity measures which must be passed this week if Greece's international creditors are to release the next 12 billion euro batch of the country's 110 billion euro bailout — and prevent a default that could drag down European banks and shake the European and world economy.

But the measures, which include spending cuts and tax hikes on even those on minimum wages, have caused widespread outrage.

Unions embarked on a two-day general strike Tuesday, halting nearly all public transport, forcing airlines to reschedule or cancel dozens of flights and bringing public services to a standstill.

Slideshow: Greek Economy (on this page)

A peaceful protest by about 20,000 people quickly degenerated into violence, with riot police firing volleys of tear gas and stun grenades to keep back hooded youths pelting them with thousands of chunks of ripped up paving stones and marble chipped from building facades and steps. Police said 37 policemen were injured during Tuesday's riots, while 14 protesters were arrested. Emergency services said nine protesters were injured.

Greece is no stranger to violent demonstrations or strikes, and these are not expected to derail the parliamentary votes on Wednesday and Thursday — but they have added to an atmosphere of deep dissatisfaction.

Even some deputies within Prime Minister George Papandreou's governing Socialists have voiced dissatisfaction with the measures, with two of them indicating they might not vote in favor. However, the Socialists hold a five-seat majority in the 300-member Parliament, and the bills should muster the simple majority of 151 votes to pass.

European officials have also been pressuring Greece's the main conservative opposition party to back the austerity bill, but so far their urgings have failed to convince conservative party leader Antonis Samaras.

"I trust that the Greek political leaders are fully aware of the responsibility that lies on their shoulders to avoid default," European Monetary Affairs Commissioner Olli Rehn said.

Image: Demonstrators wearing gas masks walk amid tear gas during clashes with police in front of the Greek parliament
Filippo Monteforte  /  AFP - Getty Images
Demonstrators wearing gas masks walk amid tear gas during clashes with police in front of the Greek parliament Tuesday, during a protest against sweeping austerity cuts.

In addition to seeking the next batch of bailout funds, Greece looks like it will need another financial rescue. Papandreou has said a second bailout would be roughly the same size as the first and hopefully on better terms.

If Greece approves the legislation, euro zone finance ministers meeting in Brussels on Sunday are likely to agree to release the next aid tranche, with the IMF following on July 5.

Attention will then switch to putting together a second rescue package for Greece of about the same magnitude as the initial 110 billion euro bailout agreed last year.

The new program would involve some 30 billion euros in private sector participation via a "voluntary" rollover of maturing debt, a similar sum from privatization revenues and an expected 55 billion euros in new official funding.

But the austerity imposed in order to get the funds have led to frequent strikes and demonstrations. Police said 18 people were detained during Tuesday's riots, with five of them later arrested. At least 21 policemen were injured.

Rioters set fire to giant parasols at an outdoor cafe, using some to form barricades, and smashed windows of a McDonald's outlet and other snack shops. Snack vendors scattered, leaving half-grilled sausages lying in the street among broken glass and smashed flower pots. Staff at upscale hotels handed out surgical masks to tourists and helped them with rolling luggage past the rioting, over ground strewn with rubble.

Video: Anger erupts on Athens’ streets (on this page)

Youths set fire to a satellite truck parked near parliament, which rolled downhill into a kiosk whose freezer exploded. Hooded youths ducked behind the burning truck to help themselves to ice-cream cones.

"The situation that the workers are going through is tragic and we are near poverty levels," said Spyros Linardopoulos, a protester with the PAME union blockading the port of Piraeus earlier in the day. "The government has declared war and to this war we will answer back with war."

Conservative opposition leader Antonis Samaras underlined his opposition to the economic plan despite massive pressure from fellow center-right European leaders to back it.

"This policy is wrong, it has exhausted the Greek people and Greek society," he told parliament. "If we perpetuate this mistaken policy we will only make things worse, both for Greece and for Europe."

An ongoing strike by electricity company workers kept up rolling blackouts across Greece. Not far from the violent protest, cafes and ice cream vendors popular with tourists used portable generators to keep the power on.

Many Greeks insist they should not be forced to pay for a crisis they believe politicians are responsible for.

"We don't owe any money, it's the others who stole it," said 69-year-old demonstrator Antonis Vrahas. "We're resisting for a better society for the sake of our children and grandchildren."

Even with the new austerity measures and a second bailout, many investors still think Greece is heading for some sort of default because its overall 340 billion euro debt burden is too great.

The Associated Press and Reuters contributed to this report.

Photos: Greek Economy

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