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March 10, 2010

Greek Police, Protesters Clash in Athens

by Mil Arcega

Greek riot police clashed with demonstrators again on Thursday, as tens of thousands of striking workers marched to protest government austerity measures.  The one day general strike paralyzed government services - grinding air traffic to a virtual halt and closing down hospitals and schools.  

An estimated 30,000 people marched through Athens Thursday in a second wave of protests against civil service pay cuts and a freeze on pensions worth $6.5 billion.

Near Athens University, some of the clashes turned violent as protesters hurled rocks and petrol bombs.  

Many vowed to continue the protests.

"The fight over these unpopular austerity measures must continue until we can overturn them," said one demonstrator.

Some police, Coast Guard members and firefighters joined labor unions on the streets demanding "real jobs and higher pay."  A Coast Guard lieutenant said the government's plan was driving the middle class into poverty.

"The reduction in our salaries has reached 30 percent," he said. "And if we figure into that the increase in taxes, every family of a Coast Guard, police officer and firefighter will see its income reduced to 8,000 euros annually."

The salary and pension cuts, plus a two percent increase in sales tax are aimed at reducing the country's deficit by four percent this year.  Greek debt, now estimated at 13 percent of its gross domestic output, is more than four times higher than the limit imposed by the European Union.  The crisis threatens to destabilized the euro.

Carlo Padoan, chief economist at the Organization for Economic Cooperation and Development, says Greece must act quickly to reduce its debt.

"The recommendations are very clear," said Carlo Padoan. "For a country like Greece, you need to act on the fiscal side, and therefore addressing very forcefully the root causes of your fiscal problems through spending cuts and increasing taxation."

Greek Prime Minister George Papandreou is seeking support from world leaders.  At a White House event Tuesday to honor Greek independence, President Barack Obama pledged support for a close ally.

"The prime minister is leading Greece through challenging times, but as I told him during our meeting in the Oval Office today, whether in good times or in bad times, the people of Greece will always have a friend and a partner in the United States of America," said President Obama.

Outside the White House Mr. Papandreou told reporters Greece is not asking for money.

"We are not asking for a bailout," said Prime Minister Papandreou. "We are not asking for financial help from anyone.  What we are doing is first of all, revamping our economy.  We are taking measures to put our economy on the right track."

Greek protests over the unpopular measures have resulted in a virtual shut down of the nation's transportation network, along with most government services.
 
European Union leaders are expected to make an announcement soon on specific steps aimed at ending the crisis.