Greece passes steep cuts as riots seize capital
Riot police surround Syntagma square during a 48-hour general strike in Athens, Greece. (June 28, 2011) Credit: Getty Images
Greece fended off a bankruptcy that would have roiled global markets and threatened the future of the euro when lawmakers yesterday backed controversial austerity measures in the face of violent protests. More than 100 people were injured in riots.
Investors cheered the bill -- which aims to cut spending and raise taxes by $40 billion and raise $71 billion in privatizations over five years -- but in Athens, the mood was dark. In a haze of tear gas, protesters hurled anything they could find at riot police and tried to blockade the Parliament building.
A Greek default would threaten the viability of the euro, the EU's common currency, and send shock waves through global markets similar to those that kicked off the global financial meltdown after the collapse of Lehman Brothers in 2008.
While world markets rose on the news that the bill passed, Greece is not yet out of the woods. The bill -- and another that must be passed today on implementing the austerity package -- will release the next $17 billion installment of a $157 billion international bailout from the European Union and the International Monetary Fund. Eurogroup head Jean-Claude Juncker indicated after the vote that Greece would get the fifth batch of its bailout loans.
But many Greeks complain they have already paid dearly in a year that has seen public sector salaries and pensions cut and unemployment rise to above 16 percent. "This is bad, the country will be sold for a piece of bread," said Dimitris Kostopoulos, 48, an insurer who was protesting yesterday. "There were many other more appropriate alternatives. . . . Parliament has once again betrayed us."
The next installment Greece hopes to get will only see it through September, leaving open the question of how the country, burdened with piles of debt, will right itself.
As lawmakers voted, stun grenades echoed across the square outside Parliament. Several banks and storefronts were smashed.
Violence continued throughout the afternoon, and smoke billowed from a post office beneath the Finance Ministry, before the fire was put out. Rioters set up burning barricades along Syntagma Square, where demonstrators have staged a sit-in for the past month.
A general strike that began Tuesday also ground the country to a halt, grounding planes, docking ferries and stranding tourists.
