Greece agrees cutbacks amid riots

Meanwhile Prime Minister George Papandreou was visiting European leaders seeking support for his efforts.

In the capital riot police used tear gas and baton charges to disperse demonstrators who chased the ceremonial guards away from the Tomb of the Unknown Soldier outside parliament yesterday.

It was the biggest outburst of violence since Greece’s debt crisis escalated late last year. Police say they arrested several people, and seven officers were injured.

Greece’s financial troubles have shaken the European Union and the euro whose rules were supposed to reign-in government debt.

Up to 7,000 demonstrators gathered as MPs debated the austerity package, which aims to save 4.4bn with measures including higher consumer taxes and cuts to public sector workers’ pay of up to 8 per cent.

Earlier, left-wing protesters attacked the head of Greece’s largest trade union who was addressing the crowd.

GSEE head Yiannis Panagopoulos traded blows with his assailants before being whisked away bloodied and with torn clothes.

GSEE and the ADEDY umbrella civil servant union held work stoppages to protest the austerity measures, while hospitals, schools and public transport were closed down.

Further violence broke out later in Athens, with masked youths attacking riot police inside the Council of State, Greece’s highest administrative court, and trying to break into the Labour Ministry. Rioters also smashed the glass fronts of banks, hotels, and shops.

An earlier protest ended peacefully, while there were smaller clashes during two protests in Thessaloniki, Greece’s second-largest city.

The centre-left government needs to reduce a budget deficit four times the EU limit as a percentage of annual output. The cuts are key in convincing bond markets to loan the country money and to win support from the European Union.

The centre-left government is seeking a total of 14.4bn in savings this year, to convince bond markets to loan the country money by reducing the deficit and to win support from the European Union.

In Luxembourg, Mr Papandreou met Prime Minister Jean-Claude Juncker, head of the group of eurozone finance ministers before holding talks in Berlin with German Chancellor Angela Merkel. Ms Merkel and Germany, as the biggest of the 16 countries that use the euro, would play a key role in any financial lifeline for Greece.

But the German government has said the meeting was not about giving aid and the EU’s promise of support, first issued last month, remains vague.

Despite raising 4.5bn from a successful 10-year bond issue yesterday, Athens remains under intense pressure.

Mr Papandreou has annoyed the EU by warning that Greece could request financial help from the International Monetary Fund without aid.

Mr Papandreou insists Greece is not seeking a bailout but a public commitment to a financial rescue plan.

Mr Papandreou will also discuss the debt crisis with French President Nicolas Sarkozy in Paris on Sunday, and meet US President Barack Obama on March 9 in Washington.

French Finance Minister Christine Lagarde said that President Sarkozy would back Greece if its debt woes got it into real trouble.

However, she did not explain what form that support would take.