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Athens clashes over Greece eurozone austerity deal Greece eurozone bailout: Coalition hit by defections
(40 minutes later)
Greek protesters have clashed with police in Athens at the start of a 48-hour strike against austerity measures. Greece's coalition has been hit by the resignations of four senior politicians over the latest planned spending cuts.
Demonstrators threw stones and police responded with tear gas, with reports of minor injuries on both sides. The deputy foreign minister and three ministers from the far-right Laos party quit, amid protests and a 48-hour strike over the austerity proposals.
Greek leaders have been frantically trying to agree swingeing cuts demanded by the EU and IMF in return for a new 130bn-euro ($170bn; £110bn) bailout.Greek leaders have been frantically trying to agree swingeing cuts demanded by the EU and IMF in return for a new 130bn-euro ($170bn; £110bn) bailout.
The smallest party in the coalition has withdrawn support for the package days before a parliamentary vote. The deal is still expected to pass a parliamentary vote set for Sunday.
The far-right Laos party complained that Greeks were being humiliated by Germany, and the party's four cabinet ministers offered their resignations. The Laos party complained that Greeks were being humiliated by Germany, and announced its 15 deputies would not back the austerity measures.
'Final choice'
Deputy Foreign Minister Mariliza Xenogiannakopoulou, who quit on Friday afternoon, is the most senior defection so far.
And so it wasn't enough. Days of political horse trading to agree on a package of cuts and still Brussels has said "do more". The frustration here in Athens is palpable.And so it wasn't enough. Days of political horse trading to agree on a package of cuts and still Brussels has said "do more". The frustration here in Athens is palpable.
Parliamentary approval should be the least of the problems. The coalition controls a large majority of MPs so even a backbench rebellion shouldn't sink the package. The 325m euros in extra savings are possibly feasible too - there is talk that defence could be further cut.Parliamentary approval should be the least of the problems. The coalition controls a large majority of MPs so even a backbench rebellion shouldn't sink the package. The 325m euros in extra savings are possibly feasible too - there is talk that defence could be further cut.
But written commitment to the cuts from the party leaders could be the sticking point. It's a tactic that Brussels has tried before and it faced stiff resistance from politicians who talk of national humiliation.But written commitment to the cuts from the party leaders could be the sticking point. It's a tactic that Brussels has tried before and it faced stiff resistance from politicians who talk of national humiliation.
But the price of failure is too high for Greece's government, which fears bankruptcy and a potential exit from the euro. And eurozone leaders are unlikely to cut Greece loose either. Germany's Angela Merkel has said "if the euro fails, Europe fails."But the price of failure is too high for Greece's government, which fears bankruptcy and a potential exit from the euro. And eurozone leaders are unlikely to cut Greece loose either. Germany's Angela Merkel has said "if the euro fails, Europe fails."
The Laos party has 15 deputies in Greece's 300-strong parliament. Her Pasok party, the largest in the coalition, also suffered the loss of a deputy labour minister on Thursday.
Two deputy ministers from the Socialist Pasok party, the largest in the coalition, have also quit their posts over the austerity proposals. But analysts say the cuts package should still have enough support in parliament because Pasok and its other coalition ally New Democracy account for more than 230 deputies out of a total of 300.
Deputy Foreign Minister Mariliza Xenogiannakopoulou, who quit on Friday afternoon, is the most senior defection so far. Earlier, an estimated 17,000 union members and communists took to the streets of Athens, marching to mark the start of a two-day general strike.
But analysts say the cuts package should still have enough support in parliament because Pasok and its other coalition ally New Democracy account for more than 230 deputies. Protesters also gathered near the parliament building.
Some demonstrators threw stones and petrol bombs at police, who responded by firing tear gas. A small number of people from both sides suffered minor injuries.
Finance Minister Evangelos Venizelos said it was time for Greece to make a "final strategic choice".Finance Minister Evangelos Venizelos said it was time for Greece to make a "final strategic choice".
"If we see the future of our country within eurozone, within Europe, we should do what we have to do for the programme to be approved," he said."If we see the future of our country within eurozone, within Europe, we should do what we have to do for the programme to be approved," he said.
Last night the Greeks presented their plans for austerity cuts to a meeting of eurozone ministers in Brussels.Last night the Greeks presented their plans for austerity cuts to a meeting of eurozone ministers in Brussels.
Their proposals include:Their proposals include:
  • 15,000 public-sector job cuts
  • liberalisation of labour laws
  • lowering the minimum wage by 20% from 751 euros a month to 600 euros
  • negotiating a debt write-off with banks.
  • 15,000 public-sector job cuts
  • liberalisation of labour laws
  • lowering the minimum wage by 20% from 751 euros a month to 600 euros
  • negotiating a debt write-off with banks.
But the ministers demanded a further 325m euros in savings for this year. It is thought that the shortfall came because the Greek coalition could not agree to restructuring pensions.But the ministers demanded a further 325m euros in savings for this year. It is thought that the shortfall came because the Greek coalition could not agree to restructuring pensions.
The eurozone and IMF are also insisting that Greek leaders give "strong political assurances" on the implementation of the packages.The eurozone and IMF are also insisting that Greek leaders give "strong political assurances" on the implementation of the packages.
The ministers said the conditions must be fulfilled by next Wednesday, in time for another eurozone meeting to consider releasing the bailout funds.The ministers said the conditions must be fulfilled by next Wednesday, in time for another eurozone meeting to consider releasing the bailout funds.
The BBC's Mark Lowen in Athens says Greek politicians are frustrated that their planned cuts did not meet the demands of the eurozone and IMF.The BBC's Mark Lowen in Athens says Greek politicians are frustrated that their planned cuts did not meet the demands of the eurozone and IMF.
But the government is likely to plough on, he says, because the prospect of bankruptcy and a potential exit from the eurozone strikes fear into the hearts of its leaders.But the government is likely to plough on, he says, because the prospect of bankruptcy and a potential exit from the eurozone strikes fear into the hearts of its leaders.
Greece cannot service its huge debt, and there are fears that a default could endanger Europe's financial stability and even lead to a break-up of the eurozone.Greece cannot service its huge debt, and there are fears that a default could endanger Europe's financial stability and even lead to a break-up of the eurozone.
The country is already reeling from the effects of an earlier round of austerity that followed a previous bailout. Those cuts triggered widespread unrest and violent protests.The country is already reeling from the effects of an earlier round of austerity that followed a previous bailout. Those cuts triggered widespread unrest and violent protests.
The country is deep in recession, with unemployment rising above 20%.The country is deep in recession, with unemployment rising above 20%.