Police watch over protesters in Athens during a massive anti-austerity protest on Wednesday.
Violence erupted for the second day in Athens during anti-austerity demonstrations that swept through the city centre, turning streets into battlegrounds. Greek media reported one fatality and several injuries.
It was not clear at first whether the dead man, identified as a middle-age trade unionist, succumbed to injuries sustained during the riots or had a heart attack. Later reports said he was a heart-attack victim and was taken to hospital, where he died.
What again started as a peaceful mass demonstration in Thursday morning descended into chaos in the late afternoon, with pitched battles between demonstrators and police filling the streets around Syntagma Square, facing the parliament buildings.
The riots came as Greece's international creditors warned that the country is in such dire economic shape the second rescue package, agreed in July and worth €109-billion, may not be enough to spare it from insolvency.
Greece's recession is deepening and its budget deficit is still enormous, in spite of the government's severe spending cutbacks. Greece has repeatedly missed deficit-cutting targets and an ambitious privatization program announced earlier this year has already stalled.
Rioters flung rocks and petrol bombs at the police, who responded with tear gas and stun grenades. Some police were spotted throwing rocks back at the rioters. Smoke filled the streets and visitors were prevented from leaving hotels, for fear of injuries and tear gas attacks.
The riots came shortly before the government was to try to pass new, wage-crunching austerity measures and three days before the European Union attempts to reveal a solution to the two-year-old Greek debt crisis.
On Wednesday, a peaceful protest involving about 100,000 people turned violent in the afternoon when small groups of helmeted anarchists smashed shop and hotel windows, threw rocks and petrol bombs at the police and set garbage bins on fire, filling the streets of central Athens with smoke. Crowds were dispersed with tear gas and several policemen sustained injuries.
Thursday's protests were smaller, with perhaps 50,000 people involved, though as angry as the previous day's.
The protests on Wednesday and Thursday coincided with a 48-hour general strike, one that paralyzed Athens and closed shops, schools, public transportation and airports. On Thursday, the Athens airport had reopened, as did about half the stores in city centre.
Giorgos Papadopoulos, a 20-year-old civil engineering student, said Thursday morning that he had hoped the protests would not turn violent. "The violence doesn't work, it gets you nowhere, especially when it is done by a small group of people," he said.
The socialist government of Prime Minister George Papandreou is expected to approve the new austerity measures by a thin margin. A preliminary vote in the legislation's first reading went his way on Wednesday night. His PASOK party has 154 seats in the 300-seat parliament, meaning a 151 "yes" votes are needed for a majority.
The austerity measures will reduce the wages of civil servants by about 14 per cent, eliminate about 30,000 of their jobs by the end of the year and reduce pension benefits. Approval of these measures is required before the International Monetary Fund (IMF) delivers another €8-billion installment of the first bailout fund, negotiated a year and a half ago and worth €110-billion. Athens has warned it will run out of money next month unless the installment is delivered.
If the vote is lost because of possible PASOK defections, Greece would probably descend into economic and social chaos. The austerity measures would probably fail and the IMF and the European Union might withhold further funding. New elections would have to be called.
As the protesters in Athens amassed on Thursday, EU leaders came under extreme pressure to produce a definitive debt-crisis-fighting plan at their summit in Brussels on Sunday. The pressure is especially fierce for French president Nicolas Sarkozy and German chancellor Angela Merkel. Crisis talks on Wednesday in Frankfurt meant that Mr. Sarkozy could only make a brief appearance at the bedside of his wife, Carla Bruni, as she gave birth to the couple's first child, a girl.
The Sunday meetings are likely to present plans for a Greek debt restructuring, bank recapitalizations, leverage for the newly enhanced bailout fund, known as the European Financial Stability Facility, and new economic governance for the 17-country euro zone.
Some economists doubt the EU meeting will produce the definitive crisis-fighting package that Group of 20 leaders and finance ministers, including Canada's, have been demanding as the debt crisis threatens to plunge Western economies back into recession.
In a note published Thursday, Sony Kapoor, managing director of the economic think tank Re-Define, criticized EU leaders for their lame response to the two-year-old crisis, citing the "near impossible challenge of meeting the sky-high market expectations while operating within severe financial, political and time constraints, all of their own making."
ING Bank's European economist, Carsten Brzeski, said the Brussels meeting could well produce a viable Greek debt overhaul plan, but he doubted a bank recapitalization plan could be agreed so soon. The most likely outcome, he said, is general agreement on raising Tier 1 capital ratios to perhaps 8 per cent to 9 per cent.
European markets were down on Thursday morning as investors lost confidence that the Brussels meeting will find a cure to the crisis.
Eric Reguly