Athens anti-cuts protest erupts in violence

Tear gas blanketed the capital’s main Syntagma Square, where more than 25,000 people had gathered to protest over a new package of tax rises and spending cuts needed to secure international rescue loans.

Scuffles broke out between riot police and small groups of demonstrators as more than 20,000 protesters thronged the centre of the Athens.

Youths smashed the windows of a luxury hotel on the square, ripped up paving stones to throw at police and hurled firebombs.

Demonstrators said at least 10 people were injured, and they appealed to fellow protesters to stay calm and allow ambulances through.

The protests are the centre of a crisis that could end in a disastrous debt default that would threaten the future of the eurozone and shake financial markets just as the global economy struggles to recover.

But the new bill must be passed this month if Greece is to continue tapping its rescue loans.

The government needs to pass a new 2012-2015 austerity programme worth 28 billion euros (£24.7bn) this month – or face being cut off from continued funding from a 110 billion euro (£96.9bn) package of rescue loans from European countries and the International Monetary Fund.

To meet its commitments, Prime Minister George Papandreou’s Socialists’ abandoned a pledge not to impose new taxes and have drawn up a four-year privatisation programme worth 50 billion euros (£44bn) – further fuelling protests against austerity by public utility employees and other affected groups.

The stakes are high and the results uncertain – if Greece is denied continued rescue funding, it will default on its debts, probably setting off a financial chain reaction that experts have described as catastrophic.

On Monday night, Standard & Poor slashed Greece’s credit rating from B to CCC, dropping it to the very bottom of the 131 states which have a sovereign debt rating. That suggests Greece’s creditors are less likely to get their money back than those of Pakistan, Ecuador or Jamaica.

Dozens of demonstrators who have been camped out in the capital’s main Syntagma Square since May 25 banged drums throughout the night, and were joined yesterday morning by more crowds to chant slogans outside Parliament and shouting “Resign, resign.”

Sporadic clashes on the fringes of the rally gradually spread. Police had set up a massive security operation to ensure protesters could not carry out a pledge to prevent MPs from accessing parliament. Some 5,000 officers, including hundreds of riot and motorcycle police, used parked buses and crowd barriers to prevent protesters from encircling the building, while a large part of central Athens was closed to all traffic.

The protests in Athens and in the northern city of Thessaloniki, where another 20,000 people rallied peacefully, were part of a 24-hour general strike, the result of months of growing frustration over the country’s slide.

“They keep asking us to give more,” said Ilias Iliopoulos, general secretary of the civil servants’ union Adedy. “Now, again, they will cut our salaries and bonuses, from the little that we have left.”

The protesters included both young and old, and many brought their children, hoisting them onto their shoulders to shield them from the crush.

The latest austerity drive has brought many people onto the streets for the first time.

“What can we do? We have to fight, for our children and for us,” said Dimitra Nteli, a nurse at a state hospital who was at the protest with her daughter. “After 25 years of work I earn 1,100 euros a month. Now that will drop to 900. How can we live on that?”

Her 26-year-old daughter, Christina, said the situation in Greece had led her to leave for Britain to study conflict resolution.

“I have no job here. There are no prospects,” she said.

The general strike crippled public services across the country, leaving state hospitals running on emergency staff, disrupting port traffic and public transport.