International

Anti-cuts protests erupt in Athens and Madrid

A riot police officer prepares to throw a teargas cannister to protestors during clashes near Syntagma square during a 24-hour labour strike in Athens September 26, 2012. Greek police fired teargas at hooded youths hurling petrol bombs and stones as tens of thousands took to the streets in Greece's biggest anti-austerity demonstration in months on Wednesday. REUTERS/Yorgos Karahalis

ATHENS/MADRID: Demonstrators clashed with police on the streets of Athens and Madrid Wednesday in an upsurge of popular anger at new austerity measures being imposed on two of the eurozone’s vulnerable economies.

In some of the most violent confrontations, Greek police fired tear gas at hooded rioters hurling petrol bombs as thousands joined the country’s biggest protest in more than a year.

The unrest erupted after nearly 70,000 people marched to the Greek parliament chanting “EU, IMF Out!” on the day of a general strike against further cuts demanded by foreign lenders.

“We can’t take it anymore – we are bleeding. We can’t raise our children like this,” said Dina Kokou, a 54-year-old teacher and mother of four who lives on 1,000 euros ($1,250) a month.

In Madrid, Prime Minister Mariano Rajoy faced violence on the streets of the capital and growing talk of secession in Catalonia as he moves cautiously closer to asking Europe for a bailout, aware that such an action has cost other European leaders their jobs.

In public, Rajoy has been resisting calls to move quickly to request assistance, but behind the scenes he is putting together the pieces to meet the stringent conditions that will accompany rescue funds.

Rajoy presents a tough 2013 budget Thursday, aiming to send a message that Spain is doing its deficit-cutting homework despite a recession and 25 percent unemployment.

Spain appears on course to miss its public deficit target of 6.3 percent of gross domestic product, and the central bank said the economy continued to contract sharply in the third quarter.

Rajoy is facing intense pressure from eurozone policymakers to take tougher measures, particularly on freezing pensions.

On Friday, Moody’s will publish its latest review of Spain’s credit rating, possibly downgrading the country’s debt to junk status.

On the same day, an independent audit of Spain’s banks will reveal how much money Madrid will need from a 100 billion euro aid package that Europe has already approved for the banks.

Rajoy is gradually shedding his reluctance to seek a sovereign bailout for the eurozone’s fourth biggest economy – a condition for European Central Bank intervention to cut his country’s borrowing costs.

He suggested Wednesday that he would make the move if debt financing costs remained too high for too long.

“I can assure you 100 percent that I would ask for this bailout,” he told the Wall Street Journal.

He also said he had not made his mind up on whether to allow pensions to rise in step with inflation, which could cost the government an extra 6 billion euros this year. “We need to be sufficiently flexible in order not to create any further problems,” he said when asked about pensions.

Catalonia needs a 5 billion-euro bailout from Madrid to meet debt payments this year, but Catalans believe they bear an unfairly large share of the country’s tax burden.

Artur Mas, the conservative president of Catalonia, announced Tuesday he would hold early elections in November after Rajoy rebuffed his call for more tax autonomy.

On Wednesday Mas took things further, saying Catalonia should also hold a referendum on independence, which the central government says would be unconstitutional.

With Rajoy under new pressure from the Catalans, also faced a major test, in the shape of a 24-hour strike called by the country’s two biggest unions.

Ships stayed in port, museums and monuments were shut and air traffic controllers walked off the job. Trains and flights were suspended, public offices and shops were shut, and hospitals provided a reduced service.

The bulk of those cuts is expected to come from cutting wages, pensions and welfare benefits, heaping a new wave of misery on Greeks who say repeated rounds of austerity have pushed them to the brink and failed to transform the country for the better.

Unions argue that Greece should remain in the euro but default on part of its debt and ditch the current recipe of austerity cuts in favor of higher taxes on the rich and efforts to nab wealthy tax evaders.

But with Greece facing bankruptcy and a potential eurozone exit without further aid, Samaras’s government has little choice but to push through the measures.

 
A version of this article appeared in the print edition of The Daily Star on September 27, 2012, on page 1.

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