Police clash with strikers as EU seeks more cuts in budget crisis

Protesters and police clashed in Greece yesterday as a strike against government cuts turned violent amid signs that the EU is planning to demand even greater sacrifices.

Most of the country ground to a halt with an estimated two million workers joining a general strike called by unions angry at austerity measures to rein in a 12.7 per cent budget deficit and catch up on years of vital reforms in months.

And as delegations from the European Commission and International Monetary Fund arrived in Athens to comb through Greece’s accounts, EU officials warned that extra savings amounting to at least ¤2 billion (£1.7 billion) were likely to be demanded as early as next month.

In a further worrying sign, the rating agency Standard & Poor’s signalled that it could downgrade Greece’s sovereign credit status further next month in a move that would make it even harder to raise funds to keep up debt repayments.
“We work very hard and get paid very little. We have seen our taxes go up and our income go down — enough is enough,” said Vasilis Tsangas, a trainee lawyer taking part in the 30,000-strong protest in the capital.

“The corrupt politicians and the rich who don’t pay their taxes made this mess. They should pay for it, not the ordinary workers,” added Angelike Pavlopoulou, a virologist at the Athens Cancer Hospital, who was also taking part in the demonstration.

Scuffles broke out when a group of hooded extremists clashed with riot police, who in turn fired teargas and used pepper spray to disperse them.

Air, rail and maritime transport were virtually stopped while Athens metro and bus lines ran a skeleton service to allow strikers to get to the protest in the city centre.

The strike shut down schools, government offices and courtrooms, and disrupted banks, hospitals and state-owned companies. There was also a news blackout from Greek media after the strike received backing from the national journalists’ union.

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Protesters in Athens chanted from loudhailers and beat drums, while many held banners and placards with slogans against capitalism. “The crisis should be paid for by the plutocracy,” read one banner. Another one called for “Permanent and steady jobs for all”.

Another 7,000 people joined a protest in Salonika, Greece’s second city. Despite the scale of the strike, recent public opinion polls showed that more than six out of ten Greeks support the austerity plans of George Papandreou’s Socialist Government.

He has announced two rounds of austerity measures, including a rise in the pension age from 61 to 63, a net public sector pay freeze, a crackdown on tax evasion and tax rises on fuel, tobacco, alcohol and property.

He has also set out a plan to reduce the deficit from 12.7 per cent to the EU target of 3 per cent by 2012. EU ministers have warned that if the sums do not add up by next month, he should also raise VAT.

The Prime Minister seems to be enjoying a honeymoon period after winning the elections last October and discovering that the economic crisis was far worse than admitted by the outgoing conservative administration.

“The majority of Greek people support the Government in its effort to introduce reforms because there is a feeling that enough is enough and politicians should get to grips with reform and end corruption,” said Charles Grant, the head of the Centre for European Reform. “I fear that by the summer, people will stop feeling as they do now that reform is necessary.”

Fury in Greece at recent criticism and allegations in foreign media that they masked their debts to ensure eurozone entry boiled over into attacks on Italy and Germany. “You simply put some amounts of money in the next year . . . it is what everybody did and Greece did it to a lesser extent than Italy for example,” Theodoros Pangalos, the Deputy Prime Minister, told the BBC. He also took issue with Germany’s stance on the Greek crisis, saying that Athens had not received ¤70 billion in compensation for the economic impact of the Nazi occupation during the Second World War.

“They took away the Greek gold that was at the Bank of Greece, they took away the Greek money and they never gave it back. This is an issue that has to be faced sometime in the future,” he said. “I don’t say they have to give back the money necessarily, but they have at least to say thanks.”

Angela Merkel, the German Chancellor, put her foot down at an EU summit to stop talk of a bailout for Greece. Andreas Peschke, a German Foreign Ministry spokesman, said that Germany had paid more than ¤4.4 billion in war reparations and compensation for slave workers, adding: “A discussion of the past is not of great help in resolving Greece’s problems.”The atmosphere soured further when the cover of the German magazine Focus showed a statue of Venus making an obscene gesture, under the headline “Swindlers in the European family”, bringing an official complaint from the Greek Government.