Athens gears up for more protests

Demonstrations in Athens are continuing Thursday, a day after after three people, including a pregnant woman, were killed in a firebombed Athens bank. Meanwhile, stock markets waver as European leaders fight to retain the credibility of the eurozone.

Reuters

As the Greek government races to push unprecedented austerity measures through parliament, the main unions are calling on their members to protest again undeterred by the the way in which yesterday's demonstration degenerated.

Parliament reconvenes at 6pm on Thursday to vote for the measures. The bill will be accompanied by another demonstration outside parliament organised by the same people who organised yesterday's march.

"One thing is certain," says correspondent John Psaropoulos in Athens, "the police are not going to take a step back the way they did yesterday. That was, I think, consciously done. The government was trying to show that it was being tolerant and pluralistic and wanted to tolerate freedom of expression, but I don't think that's an option today."

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Correspondent John Psaropoulos in Athens

Marjorie Hache

Private sector union GSEE said in a statement that it condemned "the fires, blind violence, vandalism", but it said they were determined.

Greek bank staff have also gone on a nationwide strike to protest at the deaths the previous day of three employees of a firebombed Marfin bank branch.

George Papandreou's government has pledged to cut spending by 30 billion euros over the next three years in return for emergency funding from the European Union and the International Monetary Fund. The measures include cutting public sector pay and increasing retirement ages.

On Friday, European leaders will sign off a 110 billion euro bailout package for Greece at an interest rate of 5 per cent.

French President Nicolas Sarkozy and German Chancellor Angela Merkel called for tighter monitoring of budget rules in the eurozone in a joint letter on Thursday.

"For economic and monetary union to remain a success story, dealing with this crisis alone will not suffice," they wrote. "We must reinforce the economic governance of the area."

The euro hit its lowest level against the dollar in a over year on Thursday, but regained a little after Spain successfully sold a bond, even though the country has recently had its credit rating lowered. It had to pay 3.5 per cent interest; when it sold similar five year debt in March it had to pay 2.8 per cent.

Meanwhile, the German government, which is providing 22.4 billion euros to the fund, announced that its tax receipts between 2011 and 2013 will be almost 39 billion euros less than predicted last year.

The German parliament is due to vote on the legislation on Friday. Merkel and her allies hold a majority so its success is certain, even though a group of eurosceptics is taking the case to the constitutional court.

The five eurosceptics are trying to prevent Merkel's legislation to contribute 22.4 billion euros over three years to the emergency bailout fund for Greece, including 8.4 billion this year.

Joachim Starbatty, Wilhelm Hankel, Wilhelm Noelling, Karl Albrecht Schachtschneider and Dieter Spethmann are going to the constitutional court.

"It is about more than the German payment of 8.4 billion euros," they said. "It is about the stability of the currency, and therefore about the economic and social fate of all citizens in the union."

US economist Nuriel Roubini, who is also known as Dr Doom, said Thursday that the break-up of the eurozone remains a possibility.

"The contagion is a real possibility, and not only for countries most at risk," he said.

The European Central Bank kept its main interest rate steady on 1 per cent on Thursday at its meeting in Lisbon.