Greek police clash with protesters

 

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The Independent Online

Police guarding Greece's parliament have fired tear gas and stun grenades to disperse rioting youths, as thousands marched through Athens in an annual protest to the US embassy.

Dozens of masked youths broke out of the 7,000-strong crowd to throw petrol bombs at riot police, who responded with clouds of tear gas that temporarily halted the demonstration.

With loan-dependent Greece heading for its fourth year of recession and saddled with record unemployment, the march to the US embassy is the first test of public sentiment for the new coalition government of Lucas Papademos, a technocrat enjoying widespread popularity, according to polls.

Some 7,000 police - about one for every demonstrator - were monitoring the protest.

The annual protest commemorates the 1973 bloody squashing of a student uprising by the military dictatorship that ruled Greece from 1967-74 - and whose backing from the US still rankles in the country.

Separately, a few hundred students carried the flag flown during the uprising to the embassy.

Today clashes come a day after Mr Papademos, a 64-year-old former central banker, easily won a confidence vote in parliament.

He faces a daunting task in the 100 days until early elections in February.

As well as staving off looming bankruptcy by securing the country's next rescue loan instalment, his government must pass a new austerity budget and transform paper pledges of sweeping public sector reform into action.

After its borrowing costs ballooned in 2010, Greece turned to its European partners and the International Monetary Fund, winning a 110 billion euro (£94 billion) bailout in return for deeply resented austerity measures to cut deficits bloated by years of government overspending.

But it became clear that the rescue loans were not enough, and European leaders agreed on a second 130 billion euro (£111 billion) bailout last month with an additional 100 billion euro (£ 85 billion) debt writedown by banks and other holders of Greek government bonds. Complex talks with the Institute of International Finance, a global bank lobbying group, on the writedown started in Athens Wednesday and will continue over the days and weeks ahead.

"Our goal is to structure a transaction that will attract the broadest possible support from the bondholder community," Finance Minister Evangelos Venizelos said today. "To this end, we will be listening to the IIF, other industry bodies and individual creditors' ideas about how best to design this transaction."

The government's most pressing task is to secure the release of an eight billion euro (£6.8 billion) loan instalment - frozen by the EU as it awaits written commitments from all parties in the new coalition that they will honour the terms of the new debt agreement after the next election.

AP

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