Greeks protest, almost half oppose austerity

Thousands of Greeks marched on parliament on Saturday in a show of unabated public anger after Prime Minister George Papandreou vowed to push on with an austerity campaign that a poll showed half the country opposed.

In a move meant to stifle dissent in his Socialist Party, Papandreou on Friday dismissed Finance Minister George Papaconstantinou, architect of a new five-year austerity programme that has sparked weeks of protests.

The reshuffle coincided with a pledge by France and Germany to continue funding Athens, a move that may have bought Greece and its fellow euro zone members time to prevent a messy default, even if doubts over its longer-term solvency persist.

The European Union and International Monetary Fund have made the reforms a condition for a new bailout package worth an estimated 120 billion euros ($170 billion) that Greece, shut out of markets, will need to fund itself through 2014.

Around 5,000 protesters from the Communist group PAME marched into Athens' central Syntagma square -- where demonstrations turned violent earlier this week -- chanting "the measures are killing us!"

French activists also performed with a three-metre puppet depicting a bloodied figure of Lady Justice to rhythmic drumming, in a gesture of solidarity with Greek protesters who have camped in the square for three weeks.

"What has changed with the reshuffle? Nothing," said Costas, a 22-year-old student who has been camping on the square since the beginning of the month. "We are not planning to leave unless they take back the measures."

An opinion poll taken before the reshuffle showed 47.5 percent of respondents wanted parliament to reject the reform package and for Greece to hold early elections.

Just over a third -- 34.8 percent -- wanted it to be approved so Athens could secure the second bailout.

Constantinos Routzounis, head of pollsters Kapa Research, said Greeks were not against austerity in itself but thought the reforms were unfairly aimed at the poor while wealthy tax evaders and corrupt politicians got off lightly.

"People don't want Greece to exit the euro zone. They do want fiscal consolidation measures -- but more just ones," he told personally.

Greece's biggest union GSEE, representing around 2 million workers in the private sector, called for a 48-hour strike when parliament votes on what has been dubbed the mid-term plan. The government hopes that will happen by end-June.

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Greek PM to reshuffle government to push austerity plan

 

 

Greek Prime Minister George Papandreou plans to form a new cabinet on Thursday and seek a vote of confidence from his fractious Socialist party to try to push through an austerity package and avoid default.

Papandreou must pass the new 5-year campaign of tax rises, spending cuts and sell-offs of state property to receive a new EU/IMF bailout and a 12 billion euro aid tranche that Athens needs to pay back debt that matures in August.

Papandreou may seek to replace his finance minister, George Papaconstantinou, the main architect of hugely unpopular budget cuts demanded by the EU and the IMF as part of Greece's 110 billion euro bailout last year.

The reshuffle underscores the tenuous political and popular support for the new deal, but analysts say Greece has no choice but to carry on with the austerity measures or face default.

"If Papandreou gets the vote of confidence we will not go to elections and the chances that the mid-term plan passes will increase," Theodore Couloumbis of the ELIAMEP think tank said.

Nonetheless, world stocks and the euro slumped late on Wednesday as the upheaval fed fears of a default.

Papandreou had initially offered to step down and form a unity government with opposition parties, but he abandoned the idea after the conservative New Democracy demanded Athens renegotiate its year-old international bailout.

New Democracy leader Antonis Samaras said the only way out of the crisis was early elections, but analysts said that would only happen in the unlikely event that the government failed to get a vote of confidence.

Political observers also said the reshuffle could persuade rebellious backbenchers in his PASOK party to back the measures despite widespread public anger.

"It's rare that deputies of a ruling party vote in favor of getting out of parliament," Couloumbis said.

Former ECB Vice-President Lucas Papademos is most frequently cited as a candidate to replace Papaconstantinou, who local media have said may be on his way to the Foreign Ministry.

But ALCO's Panagopoulos added that the prime minister may have a hard time convincing people outside the political arena to join his embattled government, which faced mass protests on Wednesday over the prospect of yet another squeeze.

TEARGAS

The new austerity package foresees 6.5 billion euros ($9.4 billion) in tax rises and spending cuts this year, doubling the effect of measures agreed with bailout lenders that have jacked unemployment up to a record 16.2 percent and extended a deep recession into its third year.

The plan includes new luxury taxes, a crackdown on tax evasion and tax rises on soft drinks, swimming pools, restaurant bills and real estate. The euro zone member's 750,000-strong public work force would be cut by a fifth. It also aims to raise 50 billion euros by selling off state-owned firms.

Thousands of activists and unionists converged on Athens's central Syntagma square on the parliament's front steps on Wednesday to try to stop lawmakers from debating the measures in committee that they hope to pass by the end of the month.

Stun grenades boomed around the square and plumes of smoke rose from burning garbage bins as police fired teargas and fought running skirmishes with scores of youths who fought back with rocks and long clubs.

"We want them out. Obviously these measures are not going to get us out of the crisis," Antony Vatselas, a 28-year-old mechanical engineer, crying from teargas. "They want only us to pay for it. And they are doing nothing. I want the debt to be erased. If this doesn't happen, there is no exit for Greece."

One group hurled petrol bombs and clashed with police at buildings housing the Finance Ministry, also on the square. Reuters witnesses saw flames in front of an entrance to the main building and a similar clash a few buildings down.

The vast majority of the crowd -- which included union workers, political party members, pensioners, and a wide array of Greeks upset at the new austerity measures -- only shouted at the parliament building and remained peaceful.

"Thieves, traitors!" many chanted. "Where did the money go?"

About 1,500 police closed a large part of the city center and created a corridor to hold back protesters as lawmakers drove up to the building in official limousines.

The Health Ministry said 33 people were injured. Fifteen people were arrested, police said. Police officials said the crowd reached around 30,000 but they often underestimate numbers. 

 

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Greeks rage against austerity while EU argues

Striking Greeks raged against a new wave of austerity on Wednesday after euro zone finance ministers failed to agree how to make private creditors contribute to a second bailout for their indebted country.

As workers staged a national strike, thousands of protesters -- some chanting "Thieves, traitors! Where did the money go" -- massed at parliament to try to prevent lawmakers enacting more tax hikes, spending cuts and sell-offs of state property.

Socialist Prime Minister George Papandreou must push through a five-year deficit reduction and privatisation programme to continue receiving aid from the European Union and International Monetary Fund and avoid default after Greece fell behind on its first 110 billion euros (97.0 billion pounds) rescue plan.

In Brussels, finance ministers of the 17-nation single currency area debated late into the night how to make private bondholders share the cost of the second rescue in two years without triggering even worse turmoil in financial markets.

They are aiming for a deal at a European Union summit on June 23-24 and will meet again on Sunday evening in Luxembourg. However Tuesday's apparent impasse, and the absence of the usual news conference, sent the cost of insuring Greek debt against default rocketing to an all-time high.

Highlighting contagion risks from the Greek crisis, shares in top French banks tumbled after credit ratings agency Moody's said it might downgrade them because of their exposure to Greece's debt-stricken economy.

Greek bank stocks also fell by as much as 7 percent on growing political uncertainty.

The French government sought to deflect market pressure by noting -- perhaps pointedly in the light of differences between Paris and Berlin over the Greek bailout -- that German banks were actually more exposed.

"French banks are exposed to Greece... (but) they are less exposed than the German banking sector, for instance," Secretary of State for European Affairs Laurent Wauquiez said.

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Eurogroup chief backs ‘soft’ Greek debt restructure

Eurogroup head Jean-Claude Juncker backed on Saturday a ‘soft restructuring’ of Greece’s debt with a voluntary contribution from private-sector creditors, as Germany wants.


‘There will be no total restructuring,’ he told a German radio station. ‘The governments are agreed on that, ECB support for such an option could not be obtained.’

‘There must be a soft and voluntary restructuring,’ Juncker added.

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