Greek police fire tear gas as 40,000 vent a nation's anger during Merkel's visit

Crowds burn swastikas and throw rocks at officers in Athens as they blame Germany for austerity crisis

From high-school students to pensioners, tens of thousands of Greek demonstrators swarmed into Athens yesterday to show the visiting German Chancellor, Angela Merkel, their indignation at their country's continued austerity measures.

Flouting the government's ban on protests, an estimated 40,000 people – many carrying posters depicting Ms Merkel as a Nazi – descended on Syntagma Square near the parliament building. Masked youths pelted riot police with rocks as the officers responded with tear gas.

The authorities had deployed 7,000 police, water cannon and a helicopter. Snipers were placed on rooftops to ensure the German leader's safety.

Germany has made the largest financial contribution to the European bailout fund which Greece relied on to avoid bankruptcy, so Ms Merkel is seen by many Greeks as the face of the austerity measures – implemented in return for the emergencymoney – that have battered their debt-strapped country.

Ms Merkel, whose visit to Athens was her first since the debt crisis began, said she had come to show support for Prime Minister Antonis Samaras and his government's reforms. "There is daily progress," she said after talks with Mr Samaras, adding that further effort was needed for Greece to remain on a path to recovery. "This is an effort that should be seen through, because otherwise it would make the circumstances even more dramatic later on."

Their agenda included discussion of further austerity measures totalling €13.5bn that Greece must push through over the next two years to qualify for its next tranche of bailout funds. Mr Samaras has said that, without these, his government will run out of cash next month. An emergency meeting of eurozone finance ministers could be held to approve the second tranche after next week's EU summit in Brussels, the Greek state-run TV channel, NET, reported yesterday.

According to government sources, "all subjects were broached, there was an overall positive climate and a recognition of our progress" at yesterday's meeting of the two leaders. However, the picture was less harmonious on the streets outside.

"Chancellor Merkel, take your cuts and fall off a cliff," chanted a group of pensioners wrapped in Greek flags as they rapped cooking pots and drums. Further away, a retired navy lieutenant, who gave her name only as "Mrs Mary", was sitting on a pavement in front of parliament after distributing dozens of home-made black flags to mourn the arrival of the Chancellor. "Merkel is a murderer for Greece," she said. "Her policies are leaving our kids and grandchildren unemployed and without any prospect for the future."

Unemployment in Greece currently stands at 24.4 per cent; among young people the figure is nearer 50 per cent. Mrs Mary said that she, her daughter, her son-in-law and her grandchild were surviving on her pension of €900, which had fallen from €1,600 because of spending cuts. Both her daughter and son-in-law lost their jobs when their employers, like many small firms that made up a large part of the Greek economy, went bust this year.

Not far away in Syntagma Square, Paraskevi Kallianou and a friend were holding a banner which bore a swastika and said: "No to the Fourth Reich". Mrs Kallianou, a mother of two who owns a construction company, said her income had dropped by 95 per cent.

"Merkel's policies go beyond violence. I'm here because I don't want to see my country being occupied by foreign conquerors again," she said, referring to Greece's painful memories of the Second World War, and the Nazi occupation that lasted from 1941 to 1944. Many Greeks see Ms Merkel's policies as an economic occupation of their debt-strapped country.

Most Greek opposition parties were critical of Ms Merkel's visit. Alexis Tsipras, leader of the left-wing Syriza coalition, attended the Syntagma Square rally with Bernd Riexinger, an official from Germany's Left Party. Mr Tsipras said the Greek people should not be used as the "guinea pig of this financial crisis" and the country should not become a "social cemetery".