Greece 'must take rescue package'

A pedestrian passes a damaged storefront after riots in central Athens (AP)
12 April 2012

Greece can only avoid bankruptcy by taking the joint European Union-International Monetary Fund rescue package, its government insisted as it tried to push the measure through parliament.

"Either we vote and implement the deal, or we condemn Greece to bankruptcy," Prime Minister George Papandreou said.

The deal would force Greece to impose swingeing spending cuts, including slashing salaries and pensions and increasing taxes, in return for the 110 billion euro (£94 billion) three-year package.

The rescue loans are aimed at containing the debt crisis and keeping Greece's troubles from spreading to other countries with vulnerable state finances such as Portugal and Spain. The euro has sagged as those countries have seen debt downgrades.

The spending cuts have sparked outrage in Greece, with an estimated 100,000 people spilling onto the streets of Athens during a nationwide general strike to protest at the measures.

Demonstrations quickly turned violent, with protesters trying to storm parliament and clashing with police in extensive riots that saw banks, stores and hotel windows smashed and two buildings burned.

A man and two women - one of whom was pregnant - died when they became trapped in a burning bank torched by protesters. Firefighters used a crane to rescue another four people from the building's balconies.

Finance minister George Papaconstantinou said the government had no choice but to impose the three-year austerity measures, adding that the draft bill was introduced as urgent legislation because the country was two weeks away from default on bonds maturing on May 19.

Wednesday's deaths - the first such fatalities in protests in nearly 20 years in Greece - have shocked the public in a country where violence during demonstrations is frequent but rarely results in casualties, and an impromptu shrine with flowers and candles was set up in the burned-out windows of Marfin Bank where the three workers died.

However, unions and far-left groups planned more protests against the measures: the bank workers' union, OTOE, called a strike to protest at the loss of life, condemning the violence but saying the deaths were the result of the government's austerity measures.

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