Greeks clean up after riots against austerity vote

Firefighters doused smoldering buildings and cleanup crews swept rubble
from the streets of central Athens today following a night of
rioting during which politicians approved harsh new austerity measures
demanded by bailout creditors to save the nation from bankruptcy.

At least 45 buildings were burned, including one of the capital's oldest cinemas, while dozens of stores and cafes were smashed and looted.

The stench of tear gas still hung in the air this morning, choking passers-by. More than 120 people were hurt in the rioting which also broke out in other Greek cities. Authorities said 68 police needed medical care after being injured by petrol bombs, rocks and other objects hurled at them, while at least 70 protesters were also hospitalised.

Police arrested at least 67 people, while in several cases they had to escort fire crews to burning buildings after protesters prevented access.

The rioting began yesterday afternoon ahead of a landmark vote in Parliament on yet more austerity measures. The drastic cuts debated in parliament include axing one in five civil service jobs over the next three years and slashing the minimum wage by more than a fifth.

Politicians approved the bill in a 199-74 vote — to the relief of investors who pushed the Athens stock index up 5 per cent today.

The vote paves the way for Greece's international creditors to release 130 billion euros in new rescue loans to prevent the country from a potentially catastrophic default next month — bankruptcy could push Greece out of Europe's euro currency union, drag down other troubled eurozone countries and further roil global markets.

There was nevertheless strong dissent over the austerity package among the majority Socialists and rival Conservatives who make up Greece's interim coalition government. The parties disciplined the dissenters in their ranks, with the Socialists and Conservatives expelling 22 and 21 politicians respectively, reducing their majority in the 300-member parliament from 236 to 193.

Germany gave the vote result a cautious welcome, with Foreign Minister Guido Westerwelle describing it as "a first significant step along the right road."

"However, the actual difficult work with implementing the reforms that have been agreed on is only just starting now," he said in a statement. "That is the decisive precondition for Germany and the other euro partners being able to stand by Greece with a further rescue package."

"Embarking on implementation is decisive now," Westerwelle said.

"These decisions show the will and readiness of the Greeks to make great efforts of their own ... to put the country on the right track," German Chancellor Angela Merkel's spokesman, Steffen Seibert, said in Berlin.

"These measures, and we really have to note this, are not just saving for the sake of saving, they are not cutting for the sake of cutting — this is about reforms in every political area," he said. "These are measures that are meant to restore step by step the financial room for manoeuvre that the country needs for new jobs and new growth to emerge."

Germany's vice chancellor, Philipp Roesler, also said the vote was "a step in the right direction."

"It is good that the legislation has now been approved, with a broad majority too, but what is decisive is the implementation of structural reforms," Roesler, who is also Germany's economy minister, told ARD television.

"The legislative process is one thing, implementation is another — I would like to recall again that there have been tax laws for a long time and the fact that they were not adhered to sensibly is part of the problem," he added.

Roesler noted that the upcoming report by Greece's international debt inspectors from the European Commission, European Central Bank and International Monetary Fund, known as the "troika," will be key to determining whether the measures Athens has taken suffice to allow the country to carry its debts and get further aid.

"The pressure that Germany built up in Europe was right in order at least to move Greece further in this right direction," he said.

Sunday's clashes erupted after more than 100,000 protesters marched to the parliament to rally against the drastic cuts.

"There's no question that there's quite a lot of anger in the population. There is quite a lot of frustration," said social and economic analyst Panos Tsakloglou. "However I do not think that these rioters represent all these demonstrators that were mostly peaceful yesterday."

The new bailout deal, which has not yet been finalised, will be combined with a massive bond swap deal to write off half the country's privately held debt, reducing Greece's debt load by about 100 billion euro.

AP