Athens clashes in Greece over Greece Eurozone austerity deal

Protesters threw petrol bombs at police in the Greek capital

Protesters have clashed with police in the Greek capital Athens, amid anger over fresh austerity measures approved under pressure from Eurozone ministers.

Demonstrators threw rocks and petrol bombs at police, who responded with tear gas. The clashes came after trade unions began a 48-hour strike.

Parliament is expected to vote on a package of cuts and reforms on Sunday.

Eurozone ministers say MPs must approve it before Greece receives 130bn euros ($170bn; £110bn) in bailout funds.

They are also demanding further budget cuts of 325m euros.

Analysis

And so it wasn't enough. Days of political horse trading to agree on a package of cuts and still Brussels has said "do more". The frustration here in Athens is palpable.

Parliamentary approval should be the least of the problems. The coalition controls a large majority of MPs so even a backbench rebellion shouldn't sink the package. The 325m euros in extra savings are possibly feasible too - there is talk that defence could be further cut.

But written commitment to the cuts from the party leaders could be the sticking point. It's a tactic that Brussels has tried before and it faced stiff resistance from politicians who talk of national humiliation.

But the price of failure is too high for Greece's government, which fears bankruptcy and a potential exit from the euro. And Eurozone leaders are unlikely to cut Greece loose either. Germany's Angela Merkel has said "if the Euro fails, Europe fails."

A third condition set by the Eurozone ministers is that the Greek coalition gives "strong political assurances" on the implementation of the programme".

The ministers - who met in Brussels on Thursday - said the conditions must be fulfilled by next Wednesday, when they are due to meet again to consider releasing the bailout funds.

Greece cannot service its huge debt, and there are fears that a default could endanger Europe's financial stability and even lead to a break-up of the Eurozone.

The country is already reeling from the effects of an earlier round of austerity that followed a previous bailout. Those cuts triggered widespread unrest and violent protests.

Greece is deep in recession, with unemployment rising above 20%.

The unions have condemned the latest proposed cuts as "painful measures" that would create misery.

Toughening mood

The BBC's Chris Morris in Brussels says that given Greece's worsening economy, there is concern among European ministers that the overall plan - involving the new bailout as well as an agreement for private banks to write off a substantial chunk of Greek debt - still doesn't do enough to put the country on a sustainable path.

It is the second such bailout and the mood among Eurozone countries appears to be toughening on Greece, our correspondent adds.

While the official view is still that Greece must be saved, he says there is more and more talk on the margins that a Greek default would not be a disaster.

On Thursday, Greece's three-party coalition approved a new austerity plan aimed at securing fresh bailout money needed to meet a loan repayment due on 20 March.

The measures includes:

  • 15,000 public-sector job cuts
  • liberalisation of labour laws
  • lowering the minimum wage by 20% from 751 euros per month to 600 euros
  • negotiating a debt write-off with banks.

Reform of the pension system - a key demand of the EU, IMF and European Central Bank - proved to be a stumbling block.

Talks broke up without an agreement, but officials later announced that a compromise had been reached.

However it was not clear how the 325m-euro savings would be made.

Greek Finance Minister Evangelos Venizelos, of the left-wing Pasok party, launched an attack on his conservative rival Antonis Samaras after attending the finance ministers' meeting.

Mr Venizelos said his European counterparts "took into consideration that [Mr] Samaras has still not signed" a letter committing to spending cuts and reforms.

"The (conservative) party must decide - if they want to stay in the eurozone, they have to say so clearly," Mr Venizelos said, AFP reports.

Are you in Greece? How will the measures affect you?

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