Greek protesters, police clash as MPs debate austerity plan

(ATHENS) - Greek police battled protestors in the capital Athens Sunday as burning buildings and tear gas set a tense backdrop for a parliamentary vote on a new austerity plan aimed at staving off bankruptcy.

Lawmakers were widely expected to defy the 100,000-strong turnout in Athens and Thessaloniki and approve the measures requested by Greece's international creditors for a multi-billion rescue fund to be unlocked.

"Around 10 buildings have been set ablaze, most of them using petrol bombs," Nikolaos Tsongas, a spokesman for the fire brigade, told AFP.

Fire engines were initially unable to intervene because the size of the protest and the chaos that filled the streets around the parliament building, where lawmakers debated the austerity plan ahead of a late-night vote.

When protestors wearing gas masks tried to break through the riot police cordon around parliament, the standoff broke out into running battles, with tear gas canisters and rocks flying in opposite directions.

An estimated 80,000 protestors gathered in Athens, police said, matching the biggest turnouts achieved against earlier austerity packages last year, while around 20,000 also demonstrated in the second city of Thessaloniki.

Finance Minister Evangelos Venizelos told parliament it had to back the government-approved plan to unlock a 130 billion euro ($171 billion) rescue fund from the EU and the IMF, or Greece would be forced to default.

"The situation is very clear. Tonight at midnight before the markets open the Greek parliament must send the message that our nation can and will (support the debt deal)," Venizelos said.

"Today we must understand, and persuade Greek citizens, that when you have to choose between bad and worse, you will choose the bad to avoid the worst," he added.

On the eve of the vote, Prime Minister Lucas Papademos warned the country that "we are a breath away from Ground Zero."

He urged deputies to grasp their "historic responsibility" to secure the country's financial future and warned of "economic and social catastrophe" if parliament failed to agree to the deeply unpopular cuts.

Sunday's protesters included trade unionists, youths with shaven heads waving Greek flags, communist activists and left-wing sympathisers, many of them equipped with gas masks.

Many families also joined in the rally, although the square was quickly cleared after the first round of tear gas was fired, before filling up again.

They denounced what they describe as blackmail being imposed by the international troika of the EU, the IMF and the European Central Bank in return for the bailout.

"It's not easy to live in these conditions," said 49-year-old engineer Andreas Maragoudakis. "By 2020 we will be the Germans' slaves."

Civil engineer Anastasia Papadaki, 27 said "the measures are not the solutions to the problem as they will not bring growth.

"It's just the international community blackmailing us."

The deputies, who were not expected to vote on the measure before midnight (2200 GMT), are being asked to approve moves to recapitalise Greek banks. That may involve a degree of nationalisation if they fail to get enough private money.

They must also back a bond swap agreed with private creditors which will wipe out around 100 billion euros from Greece's 350-billion-euro debt, reducing the country's massive debt burden to 120 percent of GDP.

Venizelos said the government must carry out the bond swap by Friday in order to prevent bankruptcy.

If that deadline passes, "we will not be able to swap the bonds by March 5, (and) we won't have time to resolve the issue of paying the bonds that mature between March 14 and 20," Venizelos said, adding: "If that does not happen, the country will be bankrupt."

If deputies reject the package, however, Greece will not get the funds it needs by March 20 to repay nearly 14.5 billion euros in maturing debt.

"We look into the eyes of the Greek people with full consciousness of our historic responsibility," Papademos warned Saturday in his televised address.

"The social cost of this programme is limited in comparison with the economic and social catastrophe that would follow if we do not adopt it."

"The standard of living of Greeks would collapse in the case of a disorderly bankruptcy. The country would drift into the long spiral of recession, instability, unemployment and prolonged misery."

But the proposed measures are expected to heap more hardship on ordinary Greeks already suffering from the crisis.

They involve a 22-percent cut in the minimum wage (32 percent for workers under 25); deregulating the labour market to make it easier to lay off workers; and a package of tax and pension reforms.