March 5 (Bloomberg) — Striking Greek workers shut down transport and tried to storm parliament as lawmakers passed 4.8 billion euros ($6.5 billion) in budget cuts, including wage reductions, needed to trim the region’s biggest budget deficit.
Police with riot shields fired tear gas as demonstrators wearing biker helmets and ski masks pelted them with stones outside parliament in Athens where lawmakers approved the measures. Finance Minister George Papaconstantinou told parliament the cuts will show European Union allies and investors that Greece is making good on its deficit pledges.
“We didn’t create this crisis but now we have to pay for it,” said Manthos Adamakis, who was protesting with other catering workers outside the five-star Grande Bretagne Hotel on Syntagma Square in downtown Athens.
Tram, rail, subway and bus services shut in Athens and other cities as employees rallied against cuts to bonuses and holiday payments. A walk out by air-traffic controllers forced the cancellation of all 58 flights to and from Athens International Airport between midday and 4 p.m. and the rescheduling of another 135, according to a spokeswoman.
Papaconstantinou said European allies should now act to pledge aid should Greece need help financing its growing debt. “Obviously, the EU must undertake responsibility, which it hasn’t done yet,” he told lawmakers.
EU nations are working on a contingency rescue plan for Greece to be funded by European governments, according to two people briefed yesterday in Berlin by an EU official.
Yannis Panagopoulos, the head of GSEE, Greece’ largest union, received first aid after being attacked by protesters at the rally outside parliament. Manolis Glezos, an 87-year-old World War II resistance fighter famous for pulling down the Nazi Swastika flag from the Acropolis in 1941, was also hospitalized after being affected by tear gas during the scuffles.
Groups of youths caused damage to shops, ministries and bank branches during the protests, the Attica Police, the city’s police force, said in a statement on its Web site. Five people were arrested for involvement in the violence and seven police officers were injured, it said.
GSEE and civil servants’ union ADEDY called a 24-hour general strike for March 11. ADEDY has already held two 24-hour strikes this year after the government backtracked on pledges to grant civil servants a wage increase.
Yesterday, the PAME union, aligned to the Communist Party of Greece, took over the Finance Ministry building and the General Accounting Office.
EU officials have praised the budget package announced this week and Greek bonds gained. German Chancellor Angela Merkel, who is due to meet Prime Minister George Papandreou in Berlin later today, told reporters in Munich that the Greek measures are a “courageous step” that’s already yielding results.
“Opinion polls show that a very large majority of Greeks understand that this in the interest of the country,” European Central Bank President Jean-Claude Trichet said today in an interview with Belgium’s RTBF radio. “It’s normal that there are demonstrations when decisions are taken. What counts is the main interest of the country.”
Still, most Greeks oppose the plan to cut wages and increase value-added tax, according to the first opinion poll published since the austerity moves were announced on March 3.
Seventy-two percent of 530 people surveyed by Public Issue for Skai Television said they disagreed with a drop in bonus- vacation payments, while 68 percent opposed a value-added tax increase. Sixty-two percent said Greece will see social unrest in the next year, according to the poll broadcast yesterday.
The additional budget cuts aim to save 1.7 billion euros through a 30 percent reduction to three bonus-salary payments to civil servants, a 7 percent overall decrease in wages at wider public-sector companies and a pension freeze. The reductions are accompanied by an increase to 21 percent from 19 percent in the main VAT tax as well as in alcohol and tobacco duties.
Teachers are also striking, closing some schools, and workers at the Public Power Corp SA, the country’s biggest electricity company and controlled by the state, also called a 24-hour strike today.
To contact the reporter on this story: Maria Petrakis in Athens at firstname.lastname@example.org; David Tweed in Athens at email@example.com
Last Updated: March 5, 2010 12:03 EST
By Maria Petrakis and David Tweed