- Associated Press - Wednesday, June 15, 2011

ATHENS (AP) — Greek police fired tear gas at groups of youths hurling firebombs on the edge of an anti-austerity rally outside Parliament, where the struggling government on Wednesday was to seek support for new cutbacks to avoid a default that would be disastrous for financial markets.

Riot police set up a massive security operation in the center of the capital to keep protesters from blockading the Parliament building, where lawmakers were to discuss a new austerity package that will impose tax increases and spending cuts to 2015.

The protests are the epicenter of a crisis that could end in a disastrous default that would threaten the future of the eurozone and shake financial markets just as the global economy struggles to recover.

Wednesday’s violence adds public pressure on the government at a time when Prime Minister George Papandreou also faces an internal party rebellion from within his governing Socialists over the new austerity. But the new bill must be passed if Greece is to continue tapping its rescue loans.

The stakes are high and the results uncertain — a defection by a Socialist deputy Tuesday night has left Mr. Papandreou with a majority of just five in the 300-person Parliament. Another Socialist lawmaker said he will vote against the bill, which is set for final approval by early next month.

If Greece is denied continue rescue funding, it will default on its debts, likely setting off a financial chain reaction that experts have described as catastrophic.

In Athens, the images were not reassuring. Running clashes broke out between rock-wielding youths and riot police, who made heavy use of tear gas that wafted through Syntagma Square.

Many who had been participating in a previously peaceful rally of more than 25,000 people began to disperse to avoid the clouds of choking gas. Cafe tables and chairs lay scattered as trash bins burned and a curtain of gas blanketed the square.

The protests in Athens and in the northern city of Thessaloniki, where another 20,000 people rallied peacefully, were part of a 24-hour general strike, the result of months of growing frustration over the country’s slide.

A large part of central Athens was closed to traffic and pedestrians as police erected barricades to allow lawmakers access to Parliament by car. Some 5,000 officers, including hundreds of riot and motorcycle police, used parked buses and crowd barriers to prevent protesters from encircling the building.

The scuffles broke out as Mr. Papandreou met with the country’s president, Karolos Papoulias, in the nearby presidential mansion to brief him on the severity of the situation. About a hundred people booed and heckled as cars carrying the two swept past.

“A national effort is required because we are at a historically crucial moment and a time of crucial decisions,” Mr. Papandreou told Papoulias, adding that he was still in contact with opposition party leaders in an effort to garner cross-party support for the austerity drive.

“But on the other hand, everyone has to assume their responsibilities,” he said, according to a transcript of their conversation released by the prime minister’s office. “In any case, we will move forward with this sense of responsibility and the necessary decisions” to pull Greece out of the crisis.

The statements calmed concern, voiced mainly in the local media, that the prime minister might have been considering calling early elections.

“Resign, resign,” the crowd chanted outside Parliament. The protesters included both young and old, and many brought their children, hoisting them onto their shoulders to shield them from the crush.

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