ATHENS was in lockdown yesterday as riots spread through the city and unions kicked off a two-day strike to coincide with a crucial budget debate in parliament.
Thousands of protesters filled the streets amid the shattered glass of shop windows, wielding sticks, throwing stones and starting fires. The police retaliated with tear gas and stun grenades.
Communist trade union PAME draped banners around the Parthenon that read: “The peoples have the power and never surrender.”
Parliament faces the first of two major votes on its latest austerity budget today, with several government MPs already indicating that they are likely to vote against the measures.
If Greece cannot get the €28bn worth of cuts and at least €50bn of state asset sales through parliament, it will not qualify to receive its next instalment of bailout aid, worth €12bn, and will default in July.
The government has a majority of 155 in a parliament of 300, but without any opposition support, Prime Minister Papandreou has been forced into horse-trading with his own Socialist party members to get a bill passed.
In an attempt to shore up party support, he replaced his finance minister, George Papaconstantinou, with a party stalwart Evangelos Venizelos last week, but he might have to make further concessions to survive.
Despite the strife, markets are betting on Greece passing the budget and qualifying for its next tranche of aid.
Investors appeared to be cheered by the prospect of a deal by Eurozone banks to share some of the cost of the bailout, sending the Eurostoxx 50 up one per cent and the FTSE 100 up 0.8 per cent. The euro rose 0.4 per cent versus the greenback and 0.5 per cent against sterling.