Greeks tried to stormed parliament today as the government prepared to pass austerity legislation while failing to investigate evidence state debts were fraudulently engineered by Goldman Sachs with the help of local and EU officials.

The parliament plans to cut 4.8 billion euros from the budget to pay for the interest rates banks are demanding for paper debt they helped to contrive.

The Fed and the SEC has announced inquiries into Goldman Sach's role in inflating Greek public debt using CDS.

The savage cuts in public spending pushed through by a government that has sided with the banks are meeting with growing protests among the public.

"We didn’t create this crisis but now we have to pay for it,” said Manthos Adamakis, according to Bloomberg.

The demonstrations brought Athens to a halt today. Journalists, doctors and teachers have joined the strike.

More strikes are expected on March 11th.

A union leader was attacked by unknown individuals posing as demonstrators while giving a speech against the cuts.

Yannis Panagopoulos, the head of GSEE, Greece’ largest union, received first aid after being attacked by people posing as protesters at the rally outside parliament.

"Yesterday evening thousands of people, lead by activists and communist trade union representatives, demonstrated in Athens, Thessaloniki and in the country's major cities against the ''anti-popular and criminal'' measures urged by Premier George Papandreou who will today meet German Chancellor Angela Merkel in Berlin. During yesterday evening's demonstration, there were skirmishes with the police in the centre of the capital, " according to ANSAmed.

Finance Minister George Papaconstantinou told parliament that the state is currently paying E26 billion ($A39.22 billion) on civil servant salaries, a sum that exploded by 50 per cent in the last five years.

"Where did this money go? Each and every minister would give benefits to whoever they wanted," Papaconstantinou said.

The squandering of large sums of money, disappearing apparently in secret networks, when the average civil servant has had to tighten their belt has increased anger at government corruption.

 

Greek Protests Mount as Parliament Passes Budget Cuts (Update2)

March 05, 2010, 7:55 AM EST

More From Businessweek

 (Adds stone throwing in second paragraph, EU contingency plan in six paragraph.)

By Maria Petrakis and David Tweed

March 5 (Bloomberg) -- Striking Greek workers shut down transport and tried to storm parliament as lawmakers passed 4.8 billion euros ($6.5 billion) in budget cuts, including wage reductions, needed to trim the region’s biggest budget deficit.

Police with riot shields fired tear gas as demonstrators wearing biker helmets and gas masks pelted them with stones outside parliament in Athens where lawmakers approved the measures. Finance Minister George Papaconstantinou told parliament the cuts will show European Union allies and investors that Greece is making good on its deficit pledges.

“We didn’t create this crisis but now we have to pay for it,” said Manthos Adamakis, who was protesting with other catering workers outside the five-star Grande Bretagne Hotel on Syntagma Square in downtown Athens.

Tram, rail, subway and bus services shut in Athens and other cities as employees rallied against cuts to bonuses and holiday payments. A walk out by air-traffic controllers forced the cancellation of all 58 flights to and from Athens International Airport between midday and 4 p.m. and the rescheduling of another 135, according to a spokeswoman.

Europe’s Turn

Papaconstantinou said European allies should now act to pledge aid should Greece need help financing its growing debt. “Obviously, the EU must undertake responsibility, which it hasn’t done yet,” he told lawmakers.

EU nations are working on a contingency rescue plan for Greece to be funded by European governments, according to two people briefed yesterday in Berlin by an EU official.

Yannis Panagopoulos, the head of GSEE, Greece’ largest union, received first aid after being attacked by protesters at the rally outside parliament. GSEE called a 24-hour strike for March 11 and state employees won’t work for one day next week.

Yesterday, the PAME union, aligned to the Communist Party of Greece, took over the Finance Ministry building and the General Accounting Office.

EU officials have praised the budget package announced this week and Greek bonds gained. German Chancellor Angela Merkel, who is due to meet Prime Minister George Papandreou in Berlin later today, told reporters in Munich that the Greek measures are a “courageous step” that’s already yielding results.

Trichet’s Support

“Opinion polls show that a very large majority of Greeks understand that this in the interest of the country,” European Central Bank President Jean-Claude Trichet said today in an interview with Belgium’s RTBF radio. “It’s normal that there are demonstrations when decisions are taken. What counts is the main interest of the country.”

Most Greeks oppose plans to cut wages and increase value- added tax, according to the first opinion poll published since the austerity moves were announced on March 3.

Seventy-two percent of 530 people surveyed by Public Issue for Skai Television said they disagreed with a drop in bonus- vacation payments, while 68 percent opposed a value-added tax increase. Sixty-two percent said Greece will see social unrest in the next year, according to the poll broadcast yesterday.

The additional budget cuts aim to save 1.7 billion euros through a 30 percent reduction to three bonus-salary payments to civil servants, a 7 percent overall decrease in wages at wider public-sector companies and a pension freeze. The reductions are accompanied by an increase to 21 percent from 19 percent in the main VAT tax as well as in alcohol and tobacco duties.

Further Strikes

Teachers are also striking, closing some schools, and workers at the Public Power Corp SA, the country’s biggest electricity company and controlled by the state, have also called a 24-hour strike today.

ADEDY, which has already held two 24-hour strikes this year after the government backtracked on pledges to grant civil servants a wage increase, is considering holding another 24-hour strike next week.

--With assistance from David Tweed and Natalie Weeks in Athens. Editors: Jeffrey Donovan, Fergal O’Brien

To contact the reporter on this story: Maria Petrakis in Athens at mpetrakis@bloomberg.net

To contact the editor responsible for this story: Hellmuth Tromm at htromm@bloomberg.net

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