Greek MPs approve cuts amid riots

THE Greek parliament yesterday approved new spending cuts and taxes aimed at defusing the country's debt crisis, while protesters opposed to the measures fought police outside.

•Riot police detain a demonstrator during a protest. Greece is trying to persuade its EU partners and the markets that it can dodge bankruptcy. Picture: AFP/Getty Images

Riot police used tear gas and baton charges to disperse rioters who chased the ceremonial guards in 19th-century kilts and tasseled garters away from the Tomb of the Unknown Soldier outside the parliament, while a top trade union leader was attacked by left-wing protesters.

It was the biggest outburst of violence since Greece's debt crisis escalated late last year. Police say they arrested five people and seven officers were injured.

Up to 7,000 demonstrators gathered outside as politicians debated the austerity package, which aims to save 4.8 billion (4.3bn) with measures including higher consumer taxes and cuts to public-sector workers' pay of up to 8 per cent.

Meanwhile, the Greek prime minister George Papandreou met the Luxembourg prime minister, Jean-Claude Juncker, the head of the group of eurozone finance ministers.

Demonstrators attacked the two military guards and their escorting officers, smashing windows and kicking the guard posts. Earlier, left-wing protesters attacked the head of Greece's largest trade union, who was addressing the crowd.

GSEE head Yiannis Panagopoulos traded blows with his attackers, before being whisked away bloodied and with torn clothes.

GSEE and the ADEDY umbrella civil servant union held work stoppages to protest against the austerity measures, while hospitals, schools and public transport were closed down.

Further violence broke out in Athens, with masked youths attacking riot police inside the Council of State, Greece's highest administrative court, and trying to break into the labour ministry. Rioters also smashed the glass fronts of two banks, two hotels, a mobile phone shop and a fast-food restaurant.

The centre-left government says it is seeking a total 16bn in savings this year, to reduce a bloated budget deficit of some 30bn that is over four times the EU limit as a percentage of annual output. The cuts are key in convincing bond markets to loan Greece money and to win support from the European Union.

Mr Papandreou was also due to meet German chancellor Angela Merkel. As the biggest of the 16 countries that use the euro, Germany would play a key role in any financial lifeline the EU plans to offer Greece.

However, the German government has said that yesterday's meeting is not about giving aid and the EU's promise of support, first issued last month, remains vague.

Despite raising 5bn from a successful ten-year bond issue on Thursday, Athens remains under intense pressure from high borrowing rates. Mr Papandreou has ruffled Europe's feathers by warning that Greece could request financial help from the International Monetary Fund unless the EU details potential emergency support.

Mr Juncker said, after meeting Mr Papandreou in Luxembourg, that "we have to deal with the problem as a euro area". He said it was acceptable for the IMF to offer technical assistance, but insisted: "As the chairman of the euro group, I'd like to exclude any further involvement of the IMF."

Mr Papandreou insists that Greece is not seeking bailout money from the European Union, but a public commitment to a financial rescue plan that would reassure markets.