Riots break out as Athens submits to more cuts

The Greek parliament approved new spending cuts and taxes yesterday aimed at defusing the country's debt crisis, while protesters opposed to the measures fought with police outside.

Prime Minister George Papandreou went abroad to seek European leaders' support for his efforts.

Riot police used tear gas and baton charges to disperse rioters who had chased ceremonial guards outside the parliament building in Athens. It was the biggest outburst of violence since Greece's debt crisis escalated late last year. Police say they arrested five people, and seven officers were injured.

Up to 7,000 demonstrators gathered outside as MPs debated the austerity package which aims to save €4.8bn (£4.3 bn) with measures such as higher taxes and cuts to public sector workers' pay of 8 per cent.

Meanwhile, Mr Papandreou met the Luxembourg Prime Minister Jean-Claude Juncker, the head of the group of eurozone finance ministers. He was then due to hold talks in Berlin last night with the German Chancellor Angela Merkel.

In widespread protests, the civil servants' union held work stoppages to protest against the measures, while hospitals, schools and public transport were closed down.

Further violence broke out later yesterday in Athens, with masked youths attacking riot police inside the Council of State, Greece's highest administrative court, and trying to break in to the Labour Ministry. Rioters also smashed the glass fronts of two banks, two hotels, a mobile phone shop and a restaurant.

The centre-left government says it is seeking €16bn in savings this year, to reduce a bloated budget deficit of some €30bn – four times the EU limit.

Germany, as the largest of the 16 economies in the eurozone, would play a key role in any financial lifeline the EU plans to offer Greece. But the German government has said that yesterday's meeting is not about giving aid, and the EU's promise of support remains vague.

Despite raising €5bn from a successful 10-year bond issue on Thursday, Athens remains under intense pressure from high borrowing rates. Mr Papandreou has ruffled Europe's feathers by warning that Greece could request financial help from the International Monetary Fund unless the EU details potential support. Mr Juncker said after meeting Mr Papandreou that "we have to deal with the problem as a euro area".