Protestors shatter market claim
on 26/09/2012 20:51:22
Police fired tear gas at rioters hurling petrol bombs and chunks of marble during Greece's largest anti-austerity demonstration in six months.
The protests were part of a 24-hour general strike, the latest test for Greece's nearly four-month-old coalition government and the new spending cuts it plans to push through.
The brief but intense clashes by several hundred rioters among the 60,000 people protesting in Athens came a day after anti-austerity protests rocked the Spanish capital.
In Madrid, thousands of angry protesters again swarmed as close as they could get tonight to Parliament, watched by a heavy contingent of riot police. There was no fresh violence, but the demonstrators cut off traffic on one of the city's major thoroughfares at the height of the evening commute.
The protesters chanted for the release of 34 people detained last night in clashes that injured 64 others. They also demanded new elections to oust prime minister Mariano Rajoy and his conservative
government, which has imposed cutbacks and tax hikes, deepening the gloom in a country struggling with recession and unemployment of nearly 25%, the highest among the 17 nations using the euro.
Spain's central bank warned today that the country's economy continues to shrink "significantly," sending the Spanish stock index tumbling and its borrowing costs rising.
Across Europe, stock markets fell as well. Germany's DAX dropped 2% while the CAC-40 in France fell 2.4% and the FTSE 100 slid 1.4%. The euro was also hit, down a further 0.3% at 1.2840 dollars.
The turmoil ended weeks of relative calm and optimism among investors that Europe and eurozone might have turned a corner. Markets have been breathing easier since the European Central Bank said earlier this month it would buy unlimited amounts of government bonds to help countries with their debts.
The move by the ECB helped lower borrowing costs for indebted governments from levels that only two months ago threatened to bankrupt Spain and Italy. Stocks also rose. Media speculation about the timing and cost of a eurozone break-up or a departure by troubled Greece faded.
"Yesterday's anti-austerity protests in Madrid, together with today's 24-hour strike in Greece, are both reminders that rampant unemployment and a general collapse in living standards make people desperate and angry," said David Morrison, senior market strategist at GFT Markets.
"There are growing concerns that the situation across the eurozone is set to take a turn for the worse," he said.
Spain has struggled for months to convince investors that it can handle its debts. The government is to unveil an austere 2013 draft budget and new economic reforms Thursday. Many believe they could be a precursor to a request for financial help from the ECB.
The country is suffering its second recession in three years, with a predicted 1.5% economic contraction in 2012. The Bank of Spain warned today the recession could be deeper.
Greece, meanwhile, has been dependent since May 2010 on billions of euros in two rescue loan packages from other eurozone countries and the International Monetary Fund. In return, it slashed salaries and pensions and hiked taxes in an effort to reform an economy derailed by decades of overspending and corruption.
Shortly before Greece's strike got under way, prime minister Antonis Samaras and Finance Minister Yannis Stournaras hammered out a package of spending cuts for 2013-14 demanded by the country's international lenders, along with improved tax collection.
The government has struggled to come up with austerity measures acceptable to the country's creditors, with disagreements arising between the three coalition parties.
Stournaras was briefing the other two party leaders today, and Samaras was to meet with them tomorrow morning. If they agree, the package will be presented to Greece's debt inspectors.
Today's strike shut down Greece's famed Acropolis and halted flights for hours. Ferry services were suspended, schools, shops and gas stations were closed and hospitals functioned on emergency staff.
Government spokesman Simos Kedikoglou said the limited violence and what he called a smaller turnout than opposition parties had hoped for showed that "Greek society understands what the government is doing is the only possible solution."