Rallies cripple Athens as MPs debate new cuts

Greek police have fired teargas and water cannons to disperse thousands of protesters who massed outside parliament in central Athens in a massive show of anger against legislators who are due to narrowly pass an austerity package.

Wednesday’s violence erupted as a handful of protesters tried to break through a barricade to enter parliament, where Prime Minister Antonis Samaras is expected to barely eke out a win for the belt-tightening law despite opposition from a coalition partner.

But the parliamentary session was briefly interrupted when parliament workers went on strike and opposition legislators walked out of the chamber in protest.

Outside parliament, loud booms rang out as protesters hurled petrol bombs and police responded with teargas and stun grenades. Smoke and small fires could be seen on a street next to parliament.

That came after huge crowds braved a steady downpour and stood before riot police guarding parliament, holding flags and banners saying “It’s them or us!” and “End this disaster!”.

In all, nearly 100,000 protesters – some chanting “Fight! They’re drinking our blood” – packed the square and side streets in one of the largest rallies seen in months, police said.

Public transport was halted, schools, banks and government offices were shut and garbage was piling up on streets on the second day of a two-day nationwide strike, called to protest against the vote.

Samaras called on the Greek parliament to vote through a fresh round of austerity measures of $17.3bn of cuts, as his country aims to secure the next round of bailout funds.

Narrow vote expected

Samaras is expected to win a narrow vote for the budget cuts, despite opposition from a small party in his conservative-liberal coalition.

He said without the bailout, the country would run out of money this month and face “catastrophe”.

The fresh package of austerity measures – Greece’s fourth in three years – is meant to close Greece’s budget deficit, lower its huge debt burden and make its economy more competitive.

Backed by the leftist opposition, unions say the measures will hit the poor and spare the wealthy, while deepening a five-year recession that has wiped out a fifth of the country’s output and driven unemployment to a record 25 per cent.

Samaras has said the package will comprise the last cuts to wages and pensions. But that is cold comfort for many Greeks, whose living standards have plunged in repeated deficit-slashing schemes that have hit wage earners and retirees hardest.

The cuts include a a two-year increase in the retirement age from the current average of 65, as well as salary cuts and labour market reforms including cuts to holiday benefits, notice periods and severance pay.

The vote is the biggest test for Samaras’s government since it came to power in June. A “yes” will give Athens cash to shore up its ailing banks and pay off debt coming due late this month.

The austerity measures are accompanied by steps to make it easier for businesses to hire and fire workers, including reductions to severance pay and the warning time employers must give workers before they let them go.

The junior ruling Democratic Left party has refused to support these, saying they undermine already eroded labour rights.

Several MPs from the second ruling party, Socialist PASOK, have also wavered. But in a late boost for the government, many are saying they will vote for the measures.

Samaras’s New Democracy and the remaining PASOK MPs should be able to push the measures through anyway, with around 155 of parliament’s 300 seats.

The small leftist party has also said it will back the 2013 budget in a vote on Sunday, a second hurdle Greece must clear to receive the aid tranche.