Greek police clashed with demonstrators protesting sweeping budget cuts on Friday as the government sought support from Germany to help it avoid default, only to be told not to expect a single cent.
Police fired tear gas after a union leader was struck and hurt by youths, an Agence France-Presse reporter on the scene said, during protests against sweeping new budget and spending cuts announced on Wednesday.
The violence erupted as Greek Prime Minister George Papandreou was to meet German Chancellor Angela Merkel in Berlin later on Friday, with Germany seen as critical to any eurozone effort to help Greece restore its credibility on financial markets.
Papandreou told Germany’s Frankfurter Allgemeine newspaper he was “not asking for money” but other forms of support.
“We need support from the European Union and our partners to obtain credit on the markets at better conditions. If we do not receive this aid, we will not be able to enact the changes we foresee.”
But speaking ahead of the Merkel-Papandreou talks, Germany’s Economy Minister, Rainer Bruederle, said Berlin would not provide Greece with “one cent”.
“Papandreou said that he didn’t want one cent — in any case the German government will not give one cent,” Bruederle told reporters.
Media reports have suggested that for all the tough talk, Germany is drawing up contingency plans behind the scenes including either bilateral aid, joint European action or help from the International Monetary Fund.
Europe’s biggest economy, Germany is widely seen as the most likely candidate to help prevent a Greek default, which would be disastrous for the 16-nation eurozone.
Opposition
But there is huge opposition in Germany against such a move, with newspapers carrying angry editorials about Greek corruption and wasteful spending and Merkel allies even suggesting Greece should sell some of its islands to free up cash.
There was also anger aplenty on the streets of Athens on Friday.
A few thousand Communist protesters demonstrated in front of Parliament in Athens as debate on the austerity Bill began and ahead of a larger protest by unions scheduled for later in the day. Local protests were also scheduled in Thessaloniki and other main cities.
“We say no to anti-popular measures, to taxes and allowance cuts,” said a Communist banner deployed outside parliament.
Greece’s two main unions brought traffic to a standstill with a public-sector strike. No public transport ran in Athens in the morning, all Greek airports were to close for a four-hour period and giant traffic jams clogged the centre of the capital.
State hospitals ran on skeleton staff, while teachers, state and private media groups were also hit by the strike. Even the police union called on its members to join protests organised for the day.
But despite the unions’ show of strength, Parliament was expected to approve Papandreou’s third package of austerity measures that analysts have described as the most dramatic in peacetime by a developed nation.
Addressing Parliament, Papaconstantinou said the state was currently paying €26-billion on civil servant salaries, a sum that exploded by 50% in the last five years.
“Where did this money go? Each and every minister would give benefits to whomever they wanted,” Papaconstantinou said.
The government on Wednesday increased sales, tobacco and alcohol taxes and cut public-sector holiday allowances. Pensions were also frozen in a package worth the equivalent of about 2% of gross domestic product (GDP).
Athens has promised the European Union that it will reduce its public deficit this year by four percentage points from 12,7%.
Merkel welcomed the Greek package as “an important step” towards cutting its budget deficit and restoring trust in Athens and the euro.
Needing to borrow money urgently to pay its bills, Greece successfully raised an urgently needed €5-billion with a bond issue on Thursday.
But it had to pay an interest rate of 6,3% or about twice the rate at which Germany can borrow.
Greece’s borrowing costs shot up late last year when it was hit with a triple downgrade by credit agencies after revealing that its official budget deficit figures had been grossly under-reported. — AFP