Austerity measures passed amid riots

Key eurozone talks on Greece switched to Saturday

GMT 08:36 2011 Friday ,01 July

Arab Today, arab today Key eurozone talks on Greece switched to Saturday

A worker removes a smashed window from a McDonalds outlet in Athens's Syntagma on June 30
Athens - AFP

A worker removes a smashed window from a McDonalds outlet in Athens's Syntagma on June 30 A key eurozone finance ministers meeting on Greek debt scheduled for Sunday has been switched to a teleconference to take place on Saturday, EU and diplomatic sources said on Friday. Ministers from the 17-nation eurozone are expected to unlock billions of euros pledged to Greece after its parliament this week met demands from foreign lenders to adopt a tough package of austerity measures.
Diplomat sources said the talks due to be held late on Sunday would take place by phone or video conference. There was no immediate official announcement but a European Commission spokesman said "we have been informed" of plan for a video conference on Saturday.
The weekend talks are expected to produce the release of the fifth 12-billion-euro slice of a last year's 110-billion-euro bailout of Greece by the European Union and the International Monetary Fund.
Greece needs the cash to avoid defaulting this month.
The IMF however was reluctant to release fresh monies to Athens until receiving assurances the government could press ahead with cost-cutting measures as well as an ambitious privatisation plan aimed at putting its financial house in order.
The country needs a second bailout tipped to be almost as big as the May 2010 rescue to keep afloat and avoid its debt crisis undermining the single currency area.
Greece approved stinging new austerity measures Thursday despite riots and protests as night fell on downtown Athens, in a desperate bid to avoid national bankruptcy.
"We have fought and won a difficult battle," Prime Minister George Papandreou said after two days of voting to pass a 28.4-billion-euro ($40 billion) fiscal plan despite fierce clashes around parliament.
Facing annual budget implementation votes, the premier's reduced majority still faces knife-edge challenges on the most controversial measures and leaves him politically weak.
"In very difficult circumstances, it was another act of national responsibility," said EU president Herman Van Rompuy, referring to running battles between demonstrators hurling firecrackers and police firing tear gas during a 48-hour general strike.
Around 10:00 pm (1900 GMT), AFP estimated 10,000 protesters had returned to Syntagma Square -- many angered by accusations of police brutality, which the government announced it would probe.
Security forces too moved into place their battle-buses, riot shields and tear gas reserves.
"Several officers I know well told me they were ready to throw down their arms and join the protests," nearby 50-something bar owner Ella told AFP. "The ones I'm really angry at are the suits who order riot cops to work hand-in-hand with hooligans.
"Nothing is set when the country is run this way."
With government cuts accelerating across the continent, the final count gave 155 votes for Papandreou's austerity programme, to 136 against.
However, the premier was on much less solid ground when it came to the legal detail concerning reforms to be implemented through 2015.
Opposition conservatives backed privatisation, spending cuts and plans to lease out government-owned real estate -- but not a heavier tax burden for all, the root cause of much of the anger.
One governing-party rebel voted no to all the individual clauses, although the package in its totality does go forward.
The pressure is firmly on to prevent the debt crisis infecting other countries with high debts -- including the United States.
The volume to be contributed by private banks has caused ructions within the EU -- an issue which Belgium's finance minister Didier Reynders said was unlikely to be resolved before another July 11 meeting even though Germany announced an agreement with banks to roll over some 3.2 billion euros in Greek bond investments.
Meanwhile, Greek finance minister Evangelos Venizelos said "countries like Finland," a gold-plated euro economy influential in Brussels, also want Athens to put up collateral.
He said Helsinki "wants guarantees over and above those compatible" with Athens limits.
Greeks fear valuable tourist islands being sought as collateral for government finance, as with home loans.
With a debt pile variously put at 330 to 350 billion euros, outgoing European Central Bank figures laid bare divisions on how fast to cut.
President Jean-Claude Trichet said "corrections" are needed to create jobs; whereas executive board member Lorenzo Bini Smaghi warned of "unprecedented masochism."
The promise of a government inquiry of police brutality came after entire blocks of downtown Athens were transformed into a battlefield for hours on Wednesday evening.
Blanketed by tear gas, bat-wielding protesters fought sometimes alongside police hurling rocks and tear gas into enclosed spaces while medics carried bloodied casualties away.
Amnesty International has criticised "excessive" use of force, but many among the peaceful protesters known as the Indignants, said they expected renewed clashes as union militants, encouraged by a nationwide 24-hour port strike, raise tensions at police barriers.

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