Greek protests get violent ahead of austerity vote

18:49, Nov 07 2012

Hundreds of protesters have clashed with Greek riot police while more than 80,000 demonstrated outside Parliament, where lawmakers prepared to vote on new austerity measures needed to avoid financial disaster.

The cutbacks, worth €13.5 billion (NZ$20.8b) over the next two years, are essential if Greece is to continue receiving vital bailout funds from its international creditors to avoid bankruptcy. The vote is the toughest test yet for the country's fragile four month-old government.

Protesters hurled rocks and petrol bombs at lines of riot police guarding Parliament, who responded with volleys of tear gas and stun grenades, and the first use of water cannon in Greece in years.

Demonstrators in the packed crowd ran for cover as running battles broke out with police. Clouds of tear gas rose from Syntagma Square.

Inside the building, lawmakers interrupted the debate as Parliament employees went on strike to protest cuts to their wages brought by Finance Minister Yannis Stournaras in an amendment to the austerity bill. Stournaras declared minutes later that he was withdrawing the amendment.

The austerity package is expected to scrape through when the vote is held later in the night. But any defections or abstentions could severely weaken the conservative-led coalition formed in June.

Greece's next bailout loan installment of €31.5 billion (NZ$48.6b), out of a total of €240 billion (NZ$371b), is already five months overdue. Without it, Prime Minister Antonis Samaras says, Greece will run out of money on November 16.

If Athens cannot raise sufficient funds otherwise, it will quickly find it impossible to pay its huge debts. As well as pushing the country out of the 17-country group that uses the euro, this could trigger a nightmare of bank runs, hyperinflation and currency depreciation that would vaporise savings and put many basic goods out of the reach of many Greeks.

"We must vote in favour of the measures," conservative New Democracy lawmaker Constantinos Tassoulas urged Parliament. "It is our duty."

The measures being debated include new deep pension cuts and tax hikes, a two-year increase in the retirement age to 67, and laws that will make it easier to fire and transfer civil servants who are currently guaranteed jobs for life. The country is suffering a deep recession set to enter a sixth year, and record high unemployment of 25 per cent.

"You are throwing people onto to the street, people who need a few more years till they get their pensions," said Panagiotis Lafazanis, parliamentary spokesman for the main opposition Syriza, or Radical Left, party. "What will happen to them. Will they starve? ... This is an illegal and unconstitutional law."

Opposition parties accused the government of trampling on Greece's constitution with the proposed cuts in pensions and benefits, and complained that the bill, several hundred pages long, was too complex to be debated in a single session.