Prime Minister George Papandreou is seeking support for a new austerity programme of EUR 28 bln in cuts to take effect from 2012 to 2015.
Demonstrators confront riot police at Syntagma square in front of the Greek Parliament in central Athens, during a rally against plans for new austerity measures, yesterday. A 24-hour strike by Greece’s largest labor unions is set to cripple public services as the Socialist government begins a legislative battle to push through last-ditch cost cutting reforms that will exceed its own term in office.
Greek police have fired teargas at protesters outside parliament as MPs prepare to debate new austerity measures required for the EU and IMF bail-out package, BBC informs. Demonstrators around Syntagma Square in Athens responded by throwing yoghurt and stones. Thousands were taking part in a general strike, the third in Greece this year. Ports, public transport and banks were badly disrupted as the main public- and private-sector unions go out on strike. Prime Minister George Papandreou is seeking support for a new austerity programme of EUR 28 bln in cuts to take effect from 2012 to 2015. According to Kathimerini newspaper, the Finance ministers of the euro zone nations reached a basic understanding on a new rescue package for their EU partner at a meeting in Brussels on Tuesday afternoon, but shelved a decision on the level of assistance and other key details for their next meeting in Luxembourg in a week’s time, but before that, the French president, Nicolas Sarkozy, will visit the German chancellor, Angela Merkel, in Berlin on Friday.
State-run companies have also joined the walkout, while hospitals were only offering emergency care. However, airports were operating normally after air traffic controllers called off their strike. Police thwarted protesters who were attempting to blockade parliament and stop MPs getting in for the debate. They sealed off the roads leading to Syntagma Square and created a pathway for deputies. The Greek demonstrators are calling themselves the “indignants”, linking themselves to Spanish anti-austerity protesters who set up camps in Madrid and Barcelona until they were removed by police last month. The square was awash with Greek and Spanish flags, as well as banners reading “Resist” and the battle cry from the Spanish civil war, “No pasaran” (they shall not pass), the Athens News Agency (ANA) reports. The European Union (EU) and the International Monetary Fund (IMF) will rescue debt-laden Greece from bankruptcy with a second multi-billion euro financial aid package, a year after it received a EUR 110 bln bailout.
A top credit agency has cut Greece’s rating, making it the least credit-worthy nation out of 131 countries it monitors. The Greek government said the downgrade by Standard & Poor’s (S&P) – from B to CCC – ignored its efforts to secure funding. In order for the next tranche of rescue loans to go through, parliament must adopt the new austerity plan by the end of June. S & P has also downgraded yesterday the ratings for four Greek banks: National Bank of Greece (NBG), EFG Eurobank (EFG), Alpha Bank and Piraeus Bank, with operations in Romania, three steps, to “CCC” category of “highly speculative “.
PM: i am aware of my responsibilities
Greece is at a “historically critical” moment, Prime Minister George Papandreou said on Wednesday, and reiterated his call for national understanding, as he was greeted at the Presidential Mansion by President of the Republic Karolos Papoulias for an extraordinary meeting asked by the premier. Papandreou said that, even today (our note: yesterday), he was in contact with the leaders of the other political parties to seek understanding, adding: “Everyone undertakes his responsibilities. I am aware of my responsibilities and the responsibilities of my government towards the Greek people and the country.”
Greece, Portugal, Ireland hit fresh debt-cost highs
The cost of insuring Greek, Portuguese and Irish debt against default hit new, record highs Wednesday amid the lack of official consensus about what to do with Greece’s debt. At around 10.00 GMT, Greece’s five-year CDS – credit default swap – spread was 1.11 percentage points wider at 17 percentage points, wider from an earlier level of 16.51 percentage points, according to data-provider Markit, quoted by Wall Street Journal. This means it now costs an average of USD1,700,000 a year to insure USD10 M of debt issued by the country. On the other hand, European stock markets fell yesterday, as the continuing failure to define specifically the details of a bailout for Greece warded investors away from equity markets and into safer investments such as government bonds.