- The Washington Times - Wednesday, May 5, 2010

ATHENS — Three people died when an Athens bank went up in flames Wednesday as tens of thousands of Greeks took to the streets to protest harsh spending cuts aimed at saving the country from bankruptcy.

Tear gas drifted across the city’s center as hundreds of rioters hurled paving stones and Molotov cocktails at police, who responded with heavy use of tear gas.

At least two buildings were on fire. The fire brigade said the bodies were found in the wreckage of a Marfin Bank branch on the route of the march in the city center.

World stocks slide amid deaths in Greek riots

Demonstrators chanting, “Thieves, thieves,” attempted to break through a riot police cordon guarding Parliament and chased the ceremonial guards away from the Tomb of the Unknown Soldier in front of the building.

An estimated 100,000 people took to the streets as part of nationwide strikes to protest austerity measures imposed as a condition of bailout loans from the International Monetary Fund and other eurozone governments. The bailout is needed to keep heavily Greece from defaulting on its debts.

The loans are aimed at preventing Athens’ debt troubles from becoming a wider crisis for the euro by engulfing other financially troubled countries such as Spain and Portugal.

But the rioting underlined skepticism that the Greek government could keep up its end of the bargain, helping drive the euro below $1.29 for the first time in over a year.

Union reaction until now has been relatively muted by Greece’s volatile standards, although the country has been hit by a series of strikes. Anger mounted, however, after the announcement of new austerity measures, which were essential to unlock the loans.

Prime Minister George Papandreou on Sunday announced cuts in salaries and pensions for civil servants as well as another round of consumer tax increases as a condition of the bailout.

In Germany, Chancellor Angela Merkel urged parliament to quickly pass the country’s share of the bailout — 22 billion euros ($28.2 billion) over three years. The goal is passage by Friday; Greece faces a May 19 due date on debt it says it can’t repay without the bailout.

“Nothing less than the future of Europe, and with that the future of Germany in Europe, is at stake,” Mrs. Merkel told lawmakers. “We are at a fork in the road.”

Extensive clashes took place a broad swath of central Athens, with hundreds of people battering storefronts and smashing paving stones to throw at the police, who responded with stun grenades and volleys of tear gas that left clouds of smoke hovering over the streets.

Violence also broke out in the northern city of Thessaloniki, where another 20,000 people marched through the city center, with youths smashing windows of stores and fast-food restaurants.

The outpouring of anger appeared much more spontaneous than the frequent set-piece battles between police and anarchist youths who often spark violence during Greek demonstrations.

The marches came amid a 24-hour nationwide general strike that grounded all flights to and from Greece; shut down ports, schools and government services; and left hospitals working with emergency medical staff. The Acropolis and all other ancient sites were closed, while journalists also walked off the job, suspending television and radio news broadcasts and limiting what Greeks could learn immediately about the rioting. One newspaper, Ta Nea, broke the embargo to report the fire deaths on its website.

Greek unions concede that the cash-strapped government was forced to increase consumer taxes and slash spending, including cutting salaries and pensions for civil servants.

But they say low-income Greeks will suffer disproportionately from the measures, which aim to save 30 billion euros ($40 billion) — the country’s current budget deficit — through 2012.

“These people are losing their rights; they are losing their future,” said Yiannis Panagopoulos, head of GSEE, one of the two largest unions. “The country cannot surrender without a fight.”

IMF Managing Director Dominique Strauss-Kahn warned that the crisis could spread to other countries despite the rescue package’s efforts to contain it.

“Everyone must remain extremely vigilant” to this risk, Mr. Strauss-Kahn said in an interview published in the French newspaper Le Parisien on Wednesday.

“I completely understand the Greek population’s anger, its incomprehension at the size of the economic catastrophe,” Mr. Strauss-Kahn said. But Greeks also must understand that without these measures, “the situation would be infinitely more serious,” he said.

Those who are feeling the crunch are outraged that they have to pay for what they see as politicians’ mismanagement of their country’s economy.

“We’ll be on the streets every day, every day! You never win unless you fight,” said 76-year-old Constantinos Doganis, who gets 345 euros ($443) a month from his farming pension fund.

“It’s our fault, too, all the mistakes made by politicians over 30 years, all the people who cheat on their taxes,” he said. “But they are behaving like buzzards — the Germans borrow money at 3 percent and then lend it to us for 5. Why?”

Despite the strike, the draft bill of the new austerity measures is to be voted on Thursday. Mr. Papandreou’s Socialists hold a comfortable majority of 160 in the 300-seat Parliament, and with a simple majority of 151 votes needed, the bill is expected to be passed easily.

Associated Press writers Elena Becatoros in Athens, Greg Keller in Paris and APTN crews in Athens contributed.

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