Running battles and rebellion in Athens over new austerity moves

Greek coalition in disarray as European creditors are accused of 'blackmail'

Fresh splits emerged in Greece's fast-fracturing coalition yesterday as police fought running battles with rioters in Athens, and European leaders called again on the nation to urgently find an extra €325m (£272m) in spending cuts.

Greece faces a crucial parliamentary vote on the latest austerity measures needed to secure a second €130bn rescue package on Sunday, which the Finance Minister Evangelos Venizelos has labelled a vote on the beleaguered nation's future within the single currency bloc.

But yesterday a small partner in Greece's governing coalition, the rightwing LAOS party, said it planned to vote against the hugely unpopular new measures. The about-turn comes after deputy labour minister Yannis Koutsoukos, a member of the Pasok socialist party, walked out of the government on Thursday accusing Greece's foreign creditors of subjecting the country to "blackmail". Mr Koutsoukos was joined yesterday by the deputy foreign minister, Mariliza Xenogiannakopoulou, who became the fifth government minister to quit over the new austerity measures since they were announced on Thursday.

LAOS leader George Karatzaferis said the country could "get by without being under the German jackboot". He said: "They have stolen our pride. I cannot tolerate this. I cannot allow it, even if I have to starve."

Speaking last night, Prime Minister, Lucas Papademos, pictured below, said senior members of his government would be expelled if they oppose the austerity programme.

The defection of LAOS is not fatal to Greece's efforts to avoid a catastrophic default when a €14.5bn bond repayment falls due on 20 March because the measures will pass with the support of Socialist Pasok party and the conservative New Democrats.

Mr Papademos and heads of the three parties backing his government have already agreed to deep private sector wage cuts, civil service layoffs, and significant reductions in health, social security and military spending. But the party leaders balked at demands for more cuts to already depleted pensions, later issuing nebulous assurances that a solution had been found.

"Unfortunately, the eurogroup did not take a final, positive decision,"Mr Venizelos said after Thursday's talks in Brussels. "Many countries expressed objections, based on the fact that we did not fully complete the list of additional measures required to meet our targets for 2012. The choice we face is one of sacrifice or even greater sacrifice - on a scale that cannot be compared."

Patience in Paris and Berlin is stretched at the jockeying for position among Greece's political leaders ahead of elections which could come as soon as April, as well as Greece's reluctance to commit to the structural reforms demanded by the IMF, European Union and European Central Bank.

Despite Greece facing up to a fifth year of recession, Athens has agreed to fire 15,000 civil servants this year and slash the minimum wage and pensions, triggering waves of protests.

Jean-Claude Juncker, who chairs the Eurogroup of eurozone finance ministers, has demanded that the Greek parliament ratify the package tomorrow, and a further €325m of spending reductions needed to be identified by next Wednesday, after which euro zone finance ministers would meet again.

Greek visitors to Britain have risen despite economic strife

Simon Calder

The Greek escape...is to Britain. Despite the economic strife in Greece, the number of holiday trips here increased by one-fifth in December compared with a year earlier. Provisional figures from VisitBritain reveal a 21 per cent rise in Greek visitors to the UK – a steeper increase than from any other EU country except Finland.

Peak season for Greek visitors to Britain is between October and December, a time when there is negligible UK tourism to Greece. An extra 10,000 Greek tourists came to Britain in the last quarter of 2011. The rebound will be welcome news to Britain's tourist industry. In 2010 visitors from Greece dropped by nine per cent, and overall spend by a quarter, as austerity cuts began to bite.

Mark Di-Toro from VisitBritain said: "We are perceived by the Greece as traditional with great culture and heritage, whilst at the same time being a modern and hip place to live, work and visit."