Three people have been killed as a bank was set ablaze in Athens by protesters hurling Molotov cocktails. Today, another national strike has been called as tens of thousands take to the streets protesting the Greek government’s pending vote on a new series of austerity measures tomorrow. This is just the latest in a long series that have plagued Greece since their financial crisis began.
Since coming to power last autumn, the current Greek government discovered how the previous administration ‘cooked the books’, hiding billions of Euros of debt. Much of this was aided by foreign banks, including some in the United States, playing a complex shell-game of derivative investments. Since February, the new government has initiated a series of cuts in wages and benefits as well as tax increases. Several bailout proposals by other Euro Zone nations and now the IMF have been negotiated. However, as of yet, no aid has arrived.
The Euro Zone financial markets were hit hard this week as fears of the Debt Contagion may be spreading beyond Greece. Spain is also in trouble and now has an unemployment rate above 20%. Ireland, Portugal and Italy are among of nations with large sovereign debt issues that may face austerity measures similar to those in Greece. Even the UK appears to be on the brink of having it’s bond rating lowered as it continues to pile up debt.
Greek protesters have clashed with police before during these strikes and demonstrations, but the level of violence today has increased significantly. At least two buildings were set on fire today as some protesters even tried to storm the Greek parliament. Many of these demonstrations have been organized by unions, particularly those for public sector jobs, like public transportation. Cuts in wages, pensions and other benefits, along with draconian tax increases, are part of the deal in order for Greece to receive aid from other European nations. Germany has been a major stumbling block for these series of bailout plans, which now include the International Monetary Fund, bank-rolled primarily by the United States.
On Sunday, Greek prime minister, George Papandreou, announced a new series of austerity measures, which the Parliament will vote on tomorrow. Last week, a new bailout plan was proposed, expanding the commitment by Euro Zone nations and the IMF from some 20 Billion Euros to over 110 Billion Euros. The austerity measures are part of the plan, as Germany has been unwilling to help without Greece getting it’s own house in order. Without the bailout, Greece may begin defaulting on it’s bonds as soon as the next two weeks.
Today’s violence was not limited to Athens, as protesters in other cities smashed windows of stores and business. A 24-hour nationwide strike has closed down all airports and most public services, including schools and hospitals. Even Greek television, radio and newspapers have suspended operations today in support of the strikers. Tourist sites, such as the Acropolis are also closed. Greek citizens believe they have been cheated by their government and by foreign banks. Some in the Euro Zone believe it may be necessary to expel Greece, temporarily, from the EU, due to it’s financial crisis. Others believe that Greece should stand firm and just default on their debt, as it acquired by criminal means of financial manipulation.