No Plan B available for Athens, only solution is passage of new austerity package, EU Economic Commissioner Olli Rehn warns.
ATHENS – Police have fired tear gas in running battles with stone-throwing youths in Athens, where a 48-hour general strike was being held against a parliamentary vote on tough austerity measures. Thousands of protesters have gathered outside parliament in the capital where public transport has ground to a halt.
PM George Papandreou has said that only his EUR 28 bln austerity plan would get Greece back on its feet. If the package is not approved, Greece could run out of money within weeks. Without a new plan in place, the EU and IMF say they will withhold 12bn euros of loans which Greece needs to repay debts due in mid-July. Monday’s rally started peacefully, but escalated into running skirmishes on the fringes of the main demonstration. Some protesters started throwing stones and bottles at the police in one corner of the central Syntagma Square, with police firing tear gas to keep protesters back.
The general strike has halted most public services, banks are closed and hospitals are operating on skeleton staff. Airports were also shutting for hours at a time, with air traffic controllers walking out between 0800 and 1200 (0500-0900 GMT) and 1800 and 2200 (1500-1900 GMT). A number of flights were also cancelled at Athens international airport. Trains, buses and ferries were also affected. In Athens, the metro is the only form of public transport which will work “so as to allow Athenians to join the planned protests in the capital”, metro drivers said.
More than 5,000 police officers were due to be deployed in the centre of Athens as the protesters marched towards parliament. Protesters have blockaded the port of Pireus, near Athens, which links most Greek islands with the mainland. “The situation that the workers are undergoing is tragic and we are near poverty levels,” said Spyros Linardopoulos, a protester with the PAME union at the blockade. “The government has declared war and to this war we will answer back with war.”
The unions are angry that the government’s austerity programme will impose taxes on those earning the minimum wage, following months of other cuts which have seen unemployment rise to more than 16%. Some protesters have said they will encircle the parliament building to prevent MPs from entering. The austerity package and implementation law must be passed in separate votes on Wednesday and Thursday. Polls suggest that between 70% and 80% of Greek people oppose the austerity plan.
Meanwhile, the European Commission warned the Greek parliament that the only way to avoid an immediate default of the country’s debt is to back the government’s new austerity plan, The Telegraph said. “To those who speculate about other options, let me say this clearly: there is no Plan B to avoid default,” said Olli Rehn, the European Economics and Monetary Affairs Commissioner, underlining that there is no Plan B for the country.
He reiterated that if the EUR 28 bln austerity package is not endorsed by lawmakers, Greece will not receive a further EUR 12 bln of aid – the fifth tranche in the EUR 110 bln bail-out agreed last May. Without the aid Greece will run out of money in mid-July.
On Monday, French president Nicolas Sarkozy struck a deal with his country’s banks to restructure their holdings of Greek debt. The boss of Italy’s biggest bank also said yesterday Europe’s banks can work together with European institutions to help Greece. “I think there is room for strong collaboration,” said Corrado Passera, chief executive of Intesa Sanpaolo, quoted by the BBC.