http://www.nytimes.com/2010/05/06/world/europe/06greece.html?src=...

http://www.nytimes.com/2010/05/06/world/europe/06greece.html?src=mv

ATHENS Demonstrations against tough new austerity measures in Greece claimed their first fatalities on Wednesday with three people reported to have died inside a bank building set ablaze by protesters. The reports came as workers across Greece went on strike over deep spending cuts and new taxes aimed at staving off economic collapse.

Tear gas billowed across the central Sintagma Square in front of Parliament as demonstrators trying to storm the Parliament building hurled rocks, paving stones and gasoline bombs. Police responded with tear gas canisters that spread a choking pall of smoke. Fire fighters extinguished blazes in two buildings and protesters threw up barricades, setting fire to cars and a fire truck, news reports said.

Tens of thousands of people had converged on the city center as part of a general strike that paralyzed flights, ferries, schools and hospitals.

At one point, Reuters reported, protesters set fire to a building and a witness saw firemen evacuate at least four people. There are probably people trapped in the building, fire officials said in a statement before the news emerged that people trapped in the building had died. The police blamed what were called hooded youths for setting fire to the building.

The Greek fire brigade reported that three people died in the building, a branch of the Marfin Bank on the route of a protest march into the city center, according to The Associated Press. It had apparently been attacked with gasoline bombs.

The demonstrations were the first major protests since the Socialist government of Prime Minister George Papandreou unveiled belt-tightening changes on Sunday that amount to the biggest overhaul of the state in a generation.

As the 24-hour strike began, German Chancellor Angela Merkel told legislators that the 110-billion euro plan to bail out Greece was about nothing less than the future of Europe and the future of Germany in Europe.

Opening a debate in Berlin in which legislators are being asked to approve a law that would allow Germany to lend up to 22 billion euros to Greece as part of the overall amount agreed to last weekend, Mrs. Merkel said Germany had an exceptional responsibility for Europe and will exercise that today. She said the aid package was necessary to prevent a chain reaction that would contaminate the markets.

Mr. Papandreous reforms, which aim to squeeze savings of 30 billion euros through 2012, include cuts to salaries in Greeces sprawling public sector, higher taxes on alcohol and cigarettes, and tighter retirement rules. They are part of an effort to clear the way for a 110-billion euro rescue package aimed at preventing the debt-ridden country from defaulting.

The strikes on Wednesday shut hospitals, schools and tourism sights across the Greek capital, including the Acropolis, where several dozen protesters from the Communist Party broke the locks at the entrance to the monument on Tuesday and spread banners saying, Peoples of Europe Rise Up.

Analysts said the strikes could signal the beginning of protracted social unrest, paralyzing the economy and help push the country into deeper recession. Isolated violent clashes between demonstrators and police have erupted in recent days. But in a country where taking to the streets is a national sport, the demonstrations have thus far been largely peaceful and modest.

Many Greeks are angry and complain that they are paying the price for the profligacy of others.

But most now appear to be resigned that megaphones and protest songs are no match for the volatile financial markets that have roiled the country for the past several months. Many appear resigned to endure what some economists predict could be a ten-year period before the economy bounces back.

Despite the strike, the draft bill setting out the measures was to be discussed Wednesday afternoon in a parliamentary committee before it is put to a vote on Thursday. Mr. Papandreous Socialist party has a majority of 160 seats in the 300-seat Parliament, and the bill is expected to easily pass.

As the leader of Europes largest economy, Mrs. Merkel had held out the longest in supporting any rescue package for Greece until Mr. Papandreou had agreed to impose austerity measures including pension reductions and painful cuts in the public sector.

Mrs. Merkel defended her stance although opposition legislators Wednesday, including Frank-Walter Steinmeier, the parliamentary leader of the Social Democrats, criticized Mrs. Merkel for reacting far too slowly to the Greek crisis and failing to provide leadership.

Mrs. Merkel said immediate assistance would have been counter-productive.

Immediate assistance is the last way to guarantee the stability of the euro area altogether, she told legislators. It must go forward so as not to unleash a chain reaction onto international markets that would contaminate Europe.


Dan Bilefsky reported from Athens, and Judy Dempsey from Berlin. Alan Cowell contributed reporting from Paris.