As the Greek parliament approved a deeply unpopular austerity bill to secure a second bailout from the European Union and International Monetary Fund, protesters stormed Athens, setting fire to buildings and throwing bombs made of gas canisters at police.
The historic vote paves the way for Greece's European partners and the International Monetary Fund to release $170 billion (€130 billion) in new rescue loans, without which Greece would default on its mountain of debt next month and likely leave the eurozone — a scenario that would further roil global markets.
But critics worry that the bill, which will reduce the minimum wage by 22 percent and slash one in five civil service jobs, will condemn the Greek economy to an ever-deeper downward spiral.
As lawmakers convened to vote, 100,000 protesters descended on the capitol. At least 45 buildings were burned, including one housing the Asty, an underground cinema used by the Gestapo during World War II as a torture chamber.
As riots raged for hours, police advanced across the square, firing tear gas and stun grenades. Black-masked protesters created a wall of fire with petrol bombs. Loud booms from the protests could be heard inside parliament.
Fifty police officers and at least 55 protesters were hospitalized. Forty-five suspected rioters were arrested and another 40 were detained.
"I've had it! I can't take it anymore. There's no point in living in this country anymore," said a man walking through his smashed and looted optician store.
Violence also spread to six other Greek cities, the worst in central Volos where the town hall and tax office were damaged by fire.
Greek Prime Minister Lucas Papademos had urged lawmakers to back the bailout reforms, saying the "wrong decision" in the bailout vote would lead to catastrophic default and exit from the euro.
Altogether 199 of the 300 lawmakers backed the bill, but 43 deputies from the two parties in Papademos’ government, the socialists and conservatives, rebelled by voting against. They were immediately expelled by their parties.
'Issue of survival'
Since May 2010, Greece has survived on a €110 billion ($145 billion) bailout from its European partners and the International Monetary Fund. When that proved insufficient, a new rescue loan package worth a further €130 billion ($171 billion) was decided — combined with a massive bond swap deal that will write off half the country's privately held debt.
For both deals to materialize, Greece must persuade its deeply skeptical creditors that it has the will and ability to implement spending cuts and public sector reforms that will end years of fiscal profligacy and tame gaping budget deficits.
"Our country has an acute issue of survival," Finance Minister Evangelos Venizelos said.
"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," Venizelos said. "When you have to choose between bad and worse, you will pick what is bad to avoid what is worse."
The new cuts, which follow two years of harsh income losses and tax hikes — amid a deep recession and record high unemployment — have been demanded by Greece's bailout creditors in return for a new batch of vital rescue loans.
Pressure from Europe
Euro zone paymaster Germany ratcheted up the pressure on Sunday.
"The promises from Greece aren't enough for us anymore," German Finance Minister Wolfgang Schaeuble said in an interview published Sunday in Welt am Sonntag newspaper.
"Greece needs to do its own homework to become competitive, whether that happens in conjunction with a new rescue program or by another route that we actually don't want to take," he said.
When asked if that other route meant Greece quitting the euro zone, Schaeuble said: "That is all in the hands of the Greeks themselves. But even in the event (Greece leaves the euro zone), which almost no one assumes will happen, they will still remain part of Europe."
Introducing the legislation Sunday, Socialist lawmaker Sofia Yiannaka said the intense pressure from Greece's EU partners to pass the measures was the result of delays in implementing already agreed reforms.
"The delays have our imprint. We should not blame foreigners for them," she said.