Protesters are seen during a demonstration against austerity cuts in Barcelona, Spain, Tuesday, May 15, 2012. Spain got caught up in the uncertainty surrounding the European single currency and the electoral stalemate in Greece Monday as it saw its borrowing costs rise and stock prices fall at alarming rates. The banner reads in Catalan: "Bankers return the money". (AP Photo/Manu Fernandez)
The burnt-out shells of at least 45 buildings in central Athens were still smoldering on Monday morning after a weekend of angry protests reached its apex on Sunday night in what Greek Prime Minister Luca Papademos called the worst breakdown of violence since 2008. Broken glass, chunks of marble ripped from the public squares, and empty tear-gas canisters lined the streets after an all-night battle pitted protesters against security forces who say they were outnumbered by a 5–1 ratio. Hundreds of protesters and police officers were injured and local Greek Sky television reported that at least twice, security forces ran out of tear gas.
Protests were held across the country, including in the tourist havens of Crete and Corfu, but the violence centered in Athens, where more than 80,000 protesters took to the streets burning buildings and destroying property. An estimated 20,000 people also gathered in Greece’s second city Thessaloniki, where looters broke storefront windows and destroyed city parks. On Sunday, protesters were joined by a violent contingent of masked anarchists who took direct aim at security forces under the violent anti-authority mantra of the Black Bloc movement.
The demonstrations followed general strikes last week that were meant to warn politicians against passing a biting austerity package that would save Greece from debt default—at a hefty price tag for the population. The $4.3 billion package was ultimately approved by a 199 to 74 margin in a late-night vote, but the victory was bittersweet for Greek leaders. “We must understand and persuade Greek citizens that when you have to choose between bad and worse, you must choose the bad to avoid the worst,” Greek Finance Minister Evangelos Venizelos told Parliament ahead of the vote.
Riots Rock Greece: More Photos
Greek leaders had until Feb. 15 to adopt the austerity measures, but they were compelled to push the bill through Parliament over the weekend—before world markets opened Monday morning—in an attempt to show European leaders led by German Chancellor Angela Merkel that the country deserved to be saved. Shares in Greek banks rose by 10 percent on Monday in a clear sign of approval that the bill was passed. But the violent reaction led many to wonder whether ordinary Greeks can afford to stay in the euro zone and whether the weekend’s events will become the norm. Concern that the Greek measures are like putting a bandage on a cancerous tumor have prompted many European leaders to openly question the fate of the euro zone’s single currency. Greek leader Antonis Samaras, head of the conservative opposition who is favored to win Greek elections, warned supporters of contagion among the weaker European economies. "We should show the Europeans that what is happening in Greece will soon spread to the rest of Europe if we do not change the policy of endless austerity."
Smaller economies like Ireland and Portugal, which also have unsustainable debt like Greece, are watching to see what happens. If Greece defaults and is expelled from the euro zone, they are vulnerable to follow suit. Leaders in debt-laden Italy, which is often touted as “too big to bail, too big to fail,” and where austerity measures like those passed in Greece top the agenda, are equally worried. Italy’s interim leader Mario Monti has received accolades from President Barack Obama for his work on Italy’s economic debacle, but he’s seen as “public enemy No. 1” to many Italians who say they’ll take the Greek approach if austerity measures become too painful.
Greece and Italy are both run by caretaker governments after their democratically elected leaders George Papandreou and Silvio Berlusconi were forced to resign last fall. Both countries will have to hold elections by 2013, and many would-be candidates are concerned about the fallout from supporting these hard-hitting measures. The Greek cuts include trimming 15,000 public-sector jobs and mandating a 22 percent decrease in the minimum wage in the private sector—the third such slice in less than a year. In practical terms, the minimum-wage cut would drop the base pay for most non-professional jobs from €751 to €600 a month (in U.S. dollars, $1,000 to $795) for those who already have regular jobs and allow employers to pay 10 percent less to new employees they hire. Pensions, too, will be decreased, as will many welfare services. A 28-percent drop in tourism and rampant cost-of-living increases spawned by the unrest and panic have meant that most Greeks earn barely enough to scrape by.
Papademos, who has the unsavory task of trying to save the country from economic implosion, called for calm ahead of the Sunday-night vote. “This vandalism, violence ... they have no place in a democracy and will not be tolerated," he said in a television address before the Greek Parliament voted. “I call on the public to show calm. At these crucial times, we do not have the luxury of this type of protest. I think everyone is aware of how serious the situation is.”