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Greece shaken by strike, Cabinet resignations over EU demands

Four Cabinet members quit in protest of the European Union's demands for harsh spending cuts. Unions began a two-day general strike that brought a halt to public transportation.

February 10, 2012|By Anthee Carassava, Los Angeles Times
  • Demonstrators in Athens clash with riot police during a two-day general strike called to protest new austerity measures.
Demonstrators in Athens clash with riot police during a two-day general… (Orestis Panagiotou, European…)

Reporting from Athens — Greece's precarious financial and political situation was shaken further Friday by a nationwide strike and a wave of Cabinet resignations over demands by the European Union for ever-deeper spending cuts.

Four Cabinet members — two Socialists and two far-right conservatives — quit their posts in protest over the demands. Their exit forced Prime Minister Lucas Papademos to consider an urgent reshuffle to stanch the tide of defections before a crucial parliamentary vote on the austerity measures, scheduled for Sunday.

On Thursday, after weeks of tortuous negotiations, Greek political leaders announced that they had agreed on harsh austerity measures, only to be told by EU finance ministers hours later that the measures were not enough for Athens to secure a second international bailout to avoid bankruptcy.

Georgios Karatzaferis, leader of the far-right LAOS party, a minority partner in the coalition government, said he was retracting his initial support for the new spending cuts after the "humiliating" treatment Greece received from its European peers.

"Of course we do not want to be outside the European Union," Karatzaferis told reporters. "But we can get by without being under the German jackboot," he said, referring to Berlin's insistence on painful spending cuts and tight fiscal discipline as a cure for Europe's debt woes. Germany, Europe's largest economy, has taken the lead in pressing indebted neighbors to rein in their government spending.

It remained unclear whether all of LAOS' 16 lawmakers would follow Karatzaferis' lead; at least three of the party's lawmakers in the 300-member parliament, including the two who resigned from Cabinet positions, said they would nonetheless vote for the austerity measures.

Finance ministers from the 17 nations that use the euro deferred their approval Thursday of a new, $170-billion bailout for Greece on top of one it received in May 2010. The ministers said that last-minute concessions by the Greek government for $4 billion in spending cuts were in effect too little, too late.

Instead, they said, Greece's Parliament would have to ratify the austerity measures first. Then, party leaders would need to pledge in writing that they would not breach the deal. Also, Greek leaders are expected to flesh out the details of $420 million of the spending cuts that remain vague promises.

Failure to secure the new bailout could push cash-strapped Greece into a chaotic default by March 20, when a $19-billion bond redemption matures. That, in turn, could roil global markets.

The growing uncertainty caused the Athens Stock Exchange on Friday to plunge 4.6%.

At the same time, thousands of Greeks took to the streets of Athens to protest the new austerity measures, which include slashing the country's minimum wage by nearly a quarter and getting rid of 15,000 public-sector jobs by the end of the year.

Shouting "Resist!" and "Do not bow your heads!" protesters converged on the sprawling grounds of Parliament to vent their grievances with the country's political elite.

The largely peaceful demonstration was marred by spasms of violence when militant youths penetrated marching crowds and hurled gasoline bombs at the Finance Ministry. Police said that at least three police officers and two protesters were injured in the clashes that ensued. At least five people were detained.

Authorities said thousands of officers would remain on alert for fear of further unrest before Sunday's crucial vote.

Unions, meanwhile, began a two-day general strike that saw public transportation grind to a halt.

"At this point, we have nothing to lose," Vassilis Martakis, a 42-year-old bus driver said Friday as he marched through Athens. "There's no stopping us until Sunday."

Carassava is a special correspondent.

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