Thousands strike in Greece over austerity plans

Police use teargas and batons to disperse rioters among 20,000 protesters in Athens. Trouble flares as EU team in town to judge if ministers are on track to fix budget

Tens of thousands of strikers marched through Athens yesterday in protest against austerity plans aimed at wrenching Greece out of a debt crisis which has shaken the eurozone.

Scuffles broke out on the fringe of the protest, with police firing teargas to disperse groups of youths throwing stones. "No sacrifices, the rich should pay for the crisis," the demonstrators chanted as more than 20,000 people marched on parliament in an otherwise peaceful protest.

A 24-hour general strike grounded flights and disrupted services but stopped short of bringing the country to a standstill. Meanwhile, the Socialist government hit back at European criticism of Greece's fiscal management, accusing European Union partners of double standards and poor leadership.

The Deputy Prime Minister, Theodoros Pangalos, said Italy, France and Belgium had used the same techniques as Greece to mask their true deficits to qualify for the eurozone. "You simply put some amounts of money in the next year... it is what everybody did and Greece did it to a lesser extent than Italy for example," Mr Pangalos told the BBC World Service.

He said Germany was ill-placed to criticise Athens, given its behaviour during the Nazi occupation of Greece during the Second World War, and the looting of central bank gold reserves. "They took away the Greek gold that was at the Bank of Greece, they took away the Greek money and they never gave it back. This is an issue that has to be faced some time in the future,"he added. "I don't say they have to give back the money necessarily but they have at least to say 'thanks'."

Public- and private-sector unions, which together represent half of the Greek workforce of 5 million, want the government to scrap plans to freeze public wages, raise taxes and increase the retirement age.

"Today, Europe's eyes are turned on us," said Yannis Panagopoulos, the head of the General Confederation of Greek Workers (GSEE). "We ask the government not to give in to the desires of the markets, to set people's needs as a priority and adopt a mix of economic and social policies that won't lead to recession but to jobs," he told the rally.

The strike coincided with a visit by EU officials assessing whether Greece is on track to cut its spiralling public deficit of 12.7 per cent, more than four times higher than eurozone rules allow. The government has pledged to cut this to 8.7 per cent this year, and also to reduce the €300bn national debt.

"The team of inspectors coming from the European Commission, the European Central Bank and the International Monetary Fund... will get a taste of the dynamic reaction of the Greek workers to the huge pressures from Brussels," said an editorial in the centre-left Eleftherotypia newspaper.

The first joint walkout by the two major labour federations was the biggest test to the government's resolve since it won the election in October. Under the scrutiny of EU policymakers and markets, it has so far refused to give in to the protesters' demands. On Tuesday, the Finance minister, George Papaconstantinou, said the cabinet might decide on more measures to cut the deficit after talks with the visiting EU officials.

Workers and employers gave vastly different estimates of participation in the strike. Government officials said only about 16 per cent of public-sector workers walked off their jobs, but the civil service union Adedy put the participation rate at 90 per cent.

Most shops in Athens were open, some banks closed and the capital's chaotic traffic was quieter than usual. The Athens stock exchange operated normally. All but emergency flights to and from Greece were grounded, ships stayed tied up in dock and ministries, schools and monuments such as the Acropolis remained shut.

Some residents said they saw no reason to strike. "I don't want to participate," said Dimitris Makrivellios, 62, a petrol station owner. "Aren't people also responsible for this situation? Our economy's problems concern us all. Why should we strike?"

In a sign of persistent market jitters, Greece's borrowing costs rose after the Czech Finance minister, Eduard Janota, said Athens would find it impossible to slash its budget deficit as fast as promised.