Greece will keep repaying its debt as long as possible, government spokesman Gabriel Sakellaridis has said.
The government’s statement comes days after Interior Minister Nikos Voutsis warned Greece had run out of funds.
Gabriel Sakellaridis said Greece would maintain repayments to its EU-IMF creditors for as long as possible.
He also rejected the idea of possible capital controls that would restrict money transfers and access to savings.
Greece and its creditors must reach a deal within weeks to unlock bailout funds needed to honor debt repayments.
The leftist government was elected in January on a pledge to end austerity measures imposed as a condition of its €240 billion ($263 billion) bailout.
It has spent the past four months trying to reach a deal with creditors in the IMF, the European Union and the European Central Bank to release the final bailout tranche, worth €7.2 billion.
However, they have failed to agree over economic reforms being demanded by the creditors.
In a Greek TV interview over the weekend, Nikos Voutsis said the repayment money owed in June “will not be given and is not there to be given”.
However, Gabriel Sakellaridis said the government wanted to meet its obligations. He also said a deal would soon be reached in talks with creditors.
“That is the government’s intention and the target we have set,” he said.
“By the end of May, the start of June, to be able to have a mutually beneficial agreement.”
Gabriel Sakellaridis also dismissed the possibility of imposing capital controls if repayments were not met, as has recently been suggested by some experts and an opposition lawmakers.
Greece’s last cash injection from its international creditors was in August and the final installment of its bailout is now seen as vital.
First Greece has to meet the June 5 repayment deadline. If it fails to come to a deal with its partners, there is a fear it could default on its loans.
That could push the Greek government towards leaving the single currency, otherwise known as Grexit.
Greece has been shut out of bond markets, and has been struggling to meet debt obligations and to pay public sector wages and pensions.
Pope Francis has received a 20-year-old white Renault 4 to drive himself around Vatican City.
The car – which has 300,000 km (190,000 miles) on the clock – was presented to Pope Francis by Father Renzo Zocca at the weekend. The pontiff later drove it.
Known for his humble lifestyle, Pope Francis said he used to drive the same car in his native Argentina.
In a bid to encourage austerity in the Church, the Pope has urged officials to avoid using expensive limousines.
Pope Francis has received a 20-year-old white Renault 4 to drive himself around Vatican City
Father Renzo Zocca said he was moved by the Pope’s effort to create “a Church for the poor”, and told the Italian magazine Famiglia Cristiana that he wanted to give him a gift.
“What better than my old Renault 4?” he asked.
Father Renzo Zocca said he was surprised to receive a phone call from the pontiff accepting the gift.
The Italian priest turned up at his Vatican residence on Saturday to present the car.
Pope Francis’ bodyguards were amazed when he took the keys and drove off.
The European Commission has announced it will allow some EU member states to slow their pace of austerity cuts, amid concerns over growth.
France, Spain, Poland, Portugal, the Netherlands and Slovenia are all being given more time to complete their austerity plans.
France will get two more years to bring its budget deficit below 3% of GDP.
European Commission President Jose Manuel Barroso said the extra time must be “used wisely” to lift competitiveness.
The measures came as part of the European Commission’s country-specific recommendations.
Spain, Poland and Slovenia will also get two more years to bring down their budget deficits though spending cuts and tax increases.
The Netherlands and Portugal are having their timetables extended by one year.
Even Europe’s stronger economies, including Germany, are being urged to allow wage increases and increase flexibility in the jobs market to improve competitiveness.
Europe remains broadly in recession. The 17-member eurozone shrank by 0.2% in the first three months of the year, and is expected to register negative growth for 2013 as a whole.
The European Commission has announced it will allow some EU member states to slow their pace of austerity cuts, amid concerns over growth
There has been concern that the focus on fiscal consolidation in many EU states has worsened the economic situation.
Earlier, the OECD called on the European Central Bank (ECB) to do more to boost growth.
This month, the central bank in Frankfurt cut interest rates to a record low of 0.5% and said it was “ready to act if needed”.
In an official statement, the Commission said the extra time should be used to enact reforms.
“Giving more time for certain member states to meet their agreed objectives is designed to enable them to accelerate efforts to put their public finances into order and carry out overdue reforms,” it said.
“Reform efforts must be stepped up to credibly produce the required outcomes within the new deadlines and excessive deficits must be corrected.”
Jose Manuel Barroso stressed that the decision to allow some member states to slow the pace of austerity was made on purely economic and financial grounds, rather than for political reasons.
Speaking about the new timetable for France, he said the message remained “very demanding”.
“The extra time should be used wisely to address France’s failing competitiveness … I believe there is a growing consensus now in France about the need for those reforms,” he said.
Figures released earlier this month showed that France had entered its second recession in four years after the economy shrank by 0.2% in the first three months of 2013.
Nicos Anastasiades has won the Cypriot presidential election with 57.5% of the vote.
It was a comfortable victory of the centre-right leader over Communist-backed Stavros Malas on 42.5%. Stavros Malas has conceded victory.
Nicos Anastasiades takes power as Cyprus stands on the brink of bankruptcy, hit by the knock-on effect of Greece’s economic woes.
He favors a quick deal with foreign lenders to finalize a bailout of the Cypriot economy.
“It is a clear and strong mandate for change, for reform, for our country to exit this vicious circle of crisis,” Tasos Mitsopoulos, Nicos Anastasiades’s spokesman, told reporters according to Reuters news agency.
Jubilant supporters of Nicos Anastasiades’s Democratic Rally party waved Greek and Cypriot flags, honked car horns and set off firecrackers in the capital Nicosia as the results came in, said reports.
But Stavros Malas warned his party would be “severe critics of anything that diverts from the interest of the people or the country”, said AFP news agency.
The Cypriot economy is in recession and the state has little money in its accounts.
Nicos Anastasiades has won the Cypriot presidential election with 57.5 percent of the vote
Cyprus first asked the EU for a bailout last July to shore up its banks.
Because of the bailout deal for Greece, and the restructuring of its debts, which saw private bondholders suffer big losses, Cypriot banks lost about 75% of their investments.
However, the Cypriot bailout deal has foundered in protracted negotiations.
The new president will have to finalize a deal with the other 16 countries that use the euro and with the International Monetary Fund (IMF).
Stavros Malas supported a bailout but opposed austerity. Last week’s first round in the presidential election failed to produce a decisive result.
Nicos Anastasiades will aim to exploit massive natural gas finds off Cyprus’s coast, bringing in badly needed income and energy, but risking escalating tensions with Turkey.
He will also be under pressure to reach out to Turkish Cypriots in the north of the island, cut off since Cyprus was formally divided along ethnic lines almost four decades ago.
Who is Nicos Anastasiades?
66-year-old lawyer
A member of parliament since 1981 and leader of his centre-right DISY (the Democratic Rally) party since 1997
Says he would support austerity measures which would accompany an EU/IMF rescue package, saying the election is about “the survival of the country”
Heavy smoker known for straight-talking style – sometimes seen as autocratic
Widely respected despite political humiliation nine years ago when he supported a UN blueprint to reunify the island that was later rejected by the public
EU leaders have reached agreement on the 7-year budget for 2014-2020 after marathon talks in Brussels.
The deal was announced by European Council President Herman Van Rompuy, who said it was “worth waiting for”.
The new budget amounts to 908 billion euros ($1.2 trillion) in forecast payments. It is the first-ever reduction in the EU’s multi-annual budget.
UK PM David Cameron – who had been pressing for cuts – hailed it as a “good deal for Britain”.
“I think the British public can be proud that we have cut the seven-year credit card limit for the EU for the first time ever,” David Cameron said.
French President Francois Hollande – who had argued against big spending cuts – said it was a “good compromise”.
The agreement came after almost 24 hours of negotiations, as countries such as France and Italy sought to protect spending.
EU leaders have reached agreement on the 7-year budget for 2014-2020 after marathon talks in Brussels
The budget amounts to about 1% of the EU’s overall GDP – it is dwarfed by the combined national budgets.
It must still be approved by the European Parliament, and MEPs had previously said they were prepared to block anything that amounted to an “austerity” budget.
Herman Van Rompuy said the deal amounted to a cut of roughly 34 billion euro in both commitments and payments.
He said EU leaders had met their responsibilities by overcoming sharp differences, and he hoped the European Parliament would meet its responsibilities by passing the budget.
European Union leaders are due to begin a two-day summit in Brussels to try to strike a deal on its next seven years budget.
High EU expenditure at a time of cutbacks and austerity across the continent is the main issue dividing the 27 member states.
They failed to reach a compromise at a similar summit last November.
The summit will almost certainly demand cuts in EU administration.
However, whatever is agreed still has to go to the European Parliament and MEPs are big backers of EU spending.
The EU Commission – the EU’s executive body – had originally wanted a budget ceiling of 1.025 trillion euros ($1.4 trillion) for 2014-2020, a 5% increase. In November that was trimmed back to 973 billion euros and later revised down to 943 billion euros.
However, with other EU spending commitments included, that would still give an overall budget of 1.011 trillion euros.
The UK, Germany and other northern European nations want to lower EU spending to mirror the cuts being made by national governments across the continent.
Another grouping, led by France and Italy, wants to maintain spending but target it more at investment likely to create jobs.
European Union leaders are due to begin a two-day summit in Brussels to try to strike a deal on its next seven years budget
French President Francois Hollande told reporters on Sunday that conditions were “not yet in place” for a deal but also signaled that Paris was prepared to make compromises.
Francois Hollande and German Chancellor Angela Merkel held talks in Paris on Wednesday before attending a France-Germany football match.
Angela Merkel’s spokesman said she and Francosi Hollande had had “a short but intense meeting… to see what kind of agreement could be made”.
angela Merkel – seen as the powerbroker in the summit – has already acknowledged that the talks will be “very difficult”.
In Brussels, a European Parliament spokesman warned that more severe cuts would leave the commission unable to do its job as the EU integrates more deeply in response to the financial crisis.
“How can we imagine that an EU institution can ensure a proper banking union with a budget that is cut by whatever billions in figures we hear, here and there?” said spokesman Olivier Bailly.
“At the moment, there is a need for a reality check between the requests that are sent to the commission, the council, the parliament, or the European Central Bank, and the budget – the means – that are given to these institutions to fulfill their commitments.”
The split in the EU reflects the gap between richer European countries and those that rely most on EU funding.
The argument for higher spending is supported by many countries that are net beneficiaries, including Poland, Hungary and Spain.
Others, mostly the big net contributors, argue it is unacceptable at a time of austerity.
Germany, the UK, France and Italy are the biggest net contributors to the budget, which amounts to about 1% of the EU’s overall GDP.
Analysts say failure to reach an agreement on its seven-year budget would mean the EU falling back on more expensive annual budgets.
The Greek parliament has approved a series of unpopular tax rises aimed at boosting revenue in line with Athens’ commitments to international creditors.
The measures, approved overnight, introduce a new top tax rate of 42% for Greeks earning more than 42,000 euros ($56,000) a year.
Corporate rates also go up and the tax base now includes low-earning farmers.
Greece has been kept solvent by huge rescue loans from its EU partners and the IMF since May 2010.
The Conservative-led government insists the new measures, designed to raise up to 2.3 billion euros this year, are fair.
“We are not in favor of taxes,” Deputy Finance Minister Giorgos Mavraganis said.
“But in the current situation we must lead the country out of its impasse.”
The Greek parliament has approved a series of unpopular tax rises aimed at boosting revenue in line with Athens’ commitments to international creditors
The changes are part of an overall package approved in November to allow Greece to qualify for further bailout funds.
But the opposition says the tax rises will increase hardship for ordinary Greeks. The main opposition Radical Left Coalition says austerity has “demolished the country’s middle classes”.
Deep spending cuts and job losses have triggered street unrest across Greece in recent years.
Standard and Poor’s has raised the credit rating of Greece’s sovereign debt by six levels, praising the “strong determination” of fellow European countries to help it stay in the eurozone.
S&P has increased Greece’s rating from “selective default” to “B-minus”.
The rating agency also praised the continuing efforts by Greece’s government to cut its spending.
Greece is currently receiving the second of two bailouts.
Last week, Greece started to receive the latest tranche of the bailout funds from the European Union and International Monetary Fund.
They agreed to release 49.1 billion euros ($57 billion) after continuing austerity work by Greece, and a buyback of some of its debt.
A total of 240 billion euros has been earmarked for Greece from the two bailout loans.
So far, Greece has received nearly 149 billion euros ($191 billion) from the eurozone and the International Monetary Fund, out of that 240billion euros.
S&P said in its statement: “The upgrade reflects our view of the strong determination of European Economic and Monetary Union (eurozone) member states to preserve Greek membership in the eurozone.
“The outlook on the long-term rating is stable, balancing our view of the government’s commitment to a fiscal and structural adjustment against the economic and political challenges of doing so.”
Greece had to seek the bailouts to meet its debt repayments after years of overspending meant it could not keep up with its debt obligations.
The negative market opinion of Greece’s situation only worsened its position, as it pushed up the yield, or level of interest, that the country had to offer on the sale of its new government bonds, in order to attract buyers.
Borut Pahor, former Slovenian prime minister, has won an emphatic victory in the country’s presidential run-off election.
With almost all votes counted, Borut Pahor polled 67% to incumbent President Danilo Turk’s 33% in a poll following days of protests over the economy and alleged government corruption.
On Friday a number of people were injured as protesters clashed with police in the capital Ljubljana.
Slovenia is facing one of the eurozone’s deepest recessions.
The country’s economy has shrunk more than 8% since 2009.
Thirty-three people were charged with public order offences after the trouble in Ljubljana, police said.
Borut Pahor, former Slovenian prime minister, has won an emphatic victory in the country’s presidential run-off election
A protest that attracted thousands of people earlier in the week in the second city, Maribor, also turned violent.
Polls across Slovenia opened at 07:00 local time and closed at 19:00.
Commenting on the recent protests in the country, Borut Pahor told the Associated Press that the demonstrations “signal a lack of confidence” in government institutions.
Many protesters are angry at what they describe as harsh austerity measures being implemented by the current centre-right government.
They also accuse the government of corruption – a claim denied by the authorities.
German Chancellor Angela Merkel says she doubts an agreement can be reached on the European Union’s 2014-2020 budget at the summit taking place in Brussels.
Angela Merkel spoke after negotiations on the 2014-2020 budget were adjourned until midday on Friday.
The opening of the summit was delayed for three hours because of stark differences over the budget plans.
Most EU members support an increase in the budget but several countries say it is unacceptable at a time of austerity.
Earlier, President of the European Council Herman Van Rompuy circulated a revised proposal for the new budget and said he believed that a compromise was possible.
“I think we’re advancing a bit, but I doubt that we will reach a deal,” Angela Merkel said.
She has previously said that another summit may be necessary early next year if no deal can be reached now.
French President Francois Hollande also cautioned that an agreement might not be possible.
But he added: “We should not consider that if we don’t get there tomorrow or the day after, all would be lost.”
German Chancellor Angela Merkel says she doubts an agreement can be reached on the European Union’s 2014-2020 budget at the summit taking place in Brussels
The 90-minute session late on Thursday followed a grueling day of face-to-face meetings between Herman Van Rompuy and each of the bloc’s leaders, followed by a flurry of backroom discussions.
Before suspending talks, leaders nominated Luxembourg’s Yves Mersch to the executive board of the European Central Bank.
The EU Commission, which drafts EU laws, has called for an increase of 4.8% on the 2007-2013 budget.
The UK is the most vocal of EU member states seeking cuts in the budget to match austerity programmes at home.
“No, I’m not happy at all,” Prime Minister David Cameron said about Herman Van Rompuy’s offer to cap spending at 973 billion euros ($1.2 trillion).
“Clearly, at a time when we’re making difficult decisions at home over public spending, it would be quite wrong – it is quite wrong – for there to be proposals for this increased extra spending in the EU.”
The statement called the rebate “fully justified”. The EU Commission and some EU governments want the rebate scrapped.
David Cameron has warned he may use his veto if other EU countries call for any rise in EU spending. The Netherlands and Sweden back his call for a freeze in spending, allowing for inflation.
Poland and its former-communist neighbors, which rely heavily on EU cash, want current spending maintained or raised.
Francois Hollande has also called for subsidies for farming and development programmes to be sustained for poorer nations.
France has traditionally been a big beneficiary of EU farm support.
Failure to agree on the budget would mean rolling over the 2013 budget into 2014 on a month-by-month basis, putting some long-term projects at risk.
Possible outcomes
A deal after intense negotiations which may continue into the weekend
Failure to agree and a follow-up budget summit
If no agreement is reached by the end of 2013, the 2013 budget ceilings will be rolled over into 2014 with a 2% inflation adjustment, amid uncertainty over long-term EU projects
Greek journalist Costas Vaxevanis is due to go on trial in Athens for breach of privacy after publishing the names of 2,000 Greeks with Swiss bank accounts.
French authorities gave the names to their Greek counterparts two years ago, but documents were never investigated.
Costas Vaxevanis said that politicians should be prosecuted for keeping the names secret.
But Greek officials have said there is no proof that those on the list have broken the law.
Some of those named, said to include many prominent Greeks, are suspected of using the HSBC accounts in Switzerland for tax evasion.
Costas Vaxevanis says the list he published is the same one that was given by the then French finance minister Christine Lagarde to her Greek counterpart two years ago.
Greek officials say the list originally came from a former HSBC employee.
The names on the list are said to include politicians, businessmen and others, sparking fury among ordinary Greeks as they are hit by deep austerity measures.
The issue has revived claims that tax evasion remains rife in Greece, and that the authorities still are not serious about tackling it.
Greek journalist Costas Vaxevanis is due to go on trial in Athens for breach of privacy after publishing the names of 2,000 Greeks with Swiss bank accounts
Costas Vaxevanis, 46, said he published the list in his magazine Hot Doc “because I’m a journalist and it’s our job to tell the truth to the people”.
“The three last governments have lied and have made a mockery of the Greek people with this list,” he said.
“They were obliged to pass it to parliament or to the justice system. They didn’t do it and they should be in prison for it.”
Costas Vaxevanis said he thought the government had not acted on the list because it included friends of ministers, businessmen and powerful publishers.
He also accused much of the Greek media of ignoring the story.
“The Greek press is muzzled,” he said.
“There is a closed system of power in Greece, wielded by the political elite, businessmen and journalists.”
“If I need to go to prison I will do,” he said.
“Not because I’m a hero, but to show the injustice of what is happening in Greece.”
Lithuanians have begun voting for a new parliament in a ballot seen in the wider EU as a test for austerity policies to tackle the economic crisis.
Opinion polls suggest the centre-right government will be punished for cutting pensions and public sector pay.
Under its leadership, the economy has rebounded but analysts say it is too soon for voters to feel the impact.
A centre-left government promising to raise wages and reduce taxes for the poor is expected to emerge.
Lithuania enjoyed an economic boom fuelled by cheap Scandinavian loans until the 2008 world financial crisis.
That crisis saw economic output drop by 15%, unemployment climb and thousands of young people in the Baltic nation of 3.3 million emigrate in search of work.
Under Prime Minister Andrius Kubilius’s coalition government, GDP grew by 5.8% last year – one of the fastest rates of any EU economy – and the budget deficit has been tamed.
The price was swingeing cuts to the extent that only every third street lamp in the capital Vilnius was allowed to be lit and fuel for police cars was rationed.
“They cut my pension,” a 72-year-old man selling souvenirs in the capital Vilnius told Reuters news agency.
“I have to keep working because otherwise I won’t be able to afford the rent on my apartment, or the electricity bills.”
Opinion polls suggest the Social Democrats under Algirdas Butkevicius will do best at the polls, followed by their potential coalition ally, the Labour Party.
Algirdas Butkevicius promises to raise the minimum wage, make the rich pay more tax and put back euro entry until 2015, a year later than scheduled.
By delaying euro entry he could run a bigger deficit than euro accession rules permit. Of the Baltic states which joined the EU, only Estonia has so far joined the eurozone.
Analysts say that if the centre-left win, economic factors will oblige them to stick largely to the existing austerity programme.
The parties of the left have also promised to improve the ex-Soviet state’s strained relations with Russia, still Lithuania’s biggest trade partner.
In addition to the parliamentary election, Lithuanians are voting in a non-binding referendum on building a new nuclear power station, a project which could reduce dependence on Russian energy supplies.
Just before the election, PM Andrius Kubilius announced a lawsuit against Russian gas monopoly Gazprom for 5 billion lita ($1.9 billion), alleging that it had overcharged for deliveries.
Athens is tightening its security ahead of a visit by German Chancellor Angela Merkel, her first since the eurozone crisis erupted nearly three years ago.
Some 7,000 police officers are on duty, public gatherings are banned in certain areas of the city and protesters have been warned to “protect the peace”.
The visit comes as Greece bids to pass new cuts of 13 billion euros ($17 billion) to qualify for more bailout cash.
Analysts say Angela Merkel is regarded by many Greeks as the author of austerity.
While Germany has contributed the most money in the bailing out of Greece, its chancellor is held responsible for demanding that Greece make swingeing cuts in exchange for the financing it has received.
Analysts say Angela Merkel is regarded by many Greeks as the author of austerity
Speaking on Monday, Jean-Claude Juncker, chairman of the Eurogroup finance ministers of the eurozone, raised the pressure on Greece, calling on the government to demonstrate it could implement planned reforms “by 18 October at the latest” to qualify for the next bailout installment of 31.5 billion euros.
He was speaking as the eurozone’s new permanent fund to bail out struggling economies and banks was formally launched at the finance ministers’ meeting.
There has been growing unrest in Greece at the planned new cutbacks.
Police have banned protests on Tuesday in much of central Athens, and within a 100-metre (110-yard) radius of the route Angela Merkel’s motorcade will travel – although two planned protests elsewhere in the city will go ahead.
On Monday, public order minister Nikos Dendias appealed to protesters to “protect the peace, and above all our country’s prospects and our international image”, Reuters news agency reported.
Angela Merkel, a target for popular dissent, will be in Athens for about six hours, and will have talks with Greek Prime Minister Antonis Samaras.
The meeting is a gamble.
If there is chaos on the streets, it will only underline for the German public that Greece is a lost cause.
But Angela Merkel’s visit – her first to Greece in five years – is sending a symbolic message that she wants Greece to stay in the eurozone.
Meanwhile, the International Monetary Fund said on Monday that the global economic recovery was weakening, with government policies having failed to restore confidence.
It added that the risk of further deterioration in the economic outlook was “considerable” and had increased.
Greece’s finance minister Yannis Stournaras says the three parties in the country’s governing coalition have reached a “basic agreement” on the austerity package for 2013-14.
The measures are likely to be presented to Greece’s international lenders on Monday before going before parliament.
The cuts are necessary if Greece is to continue receiving bailout funds.
Earlier, Greece announced plans to sell most of its 34% stake in the gaming monopoly Opap.
Yannis Stournaras said there were “very few details left to work out” on the austerity package.
Greek governing coalition agreement comes the day after 50,000 anti-austerity protesters took to the streets of Athens
The deal comes the day after 50,000 anti-austerity protesters took to the streets of Athens.
The spending cuts are reported to be worth at least 11.5 billion euros ($14.8 billion) and are a condition for Greece to receive the next 31 billion-euro installment of its international loans.
The Greek government hopes to be able to present a final package of measures to the summit of eurozone finance ministers on 8 October.
Police have fired tear gas in Greece to disperse anarchists throwing petrol bombs near parliament in Athens.
Dozens were arrested during the one-day strike against planned spending cuts of 11.5 billion euros ($15 billion).
It was the first union-led action since a conservative-led coalition came to power in June.
The savings are a pre-condition to Greece receiving its next tranche of bailout funds, without which the country could face bankruptcy in weeks.
Greece needs the next 31 billion-euro installment of its international bailout, but with record unemployment and a third of Greeks pushed below the poverty line, there is strong resistance to further cuts.
Police have fired tear gas in Greece to disperse anarchists throwing petrol bombs near parliament in Athens
The government of conservative Prime Minister Antonis Samaras is proposing to save money by slashing pensions and raising the retirement age to 67.
But it has also urged the troika representing Greece’s lenders – the European Commission, the European Central Bank (ECB), and the International Monetary Fund (IMF) – to give it an extra two years to push through the austerity programme.
On Tuesday Greek Finance Minister Yannis Stournaras put a price on that delay for the first time – saying it would in effect cost as much as 15 billion euros.
The Greek protest follows a series of demonstrations in Spain and Portugal, which are also facing stringent austerity measures.
An estimated 50,000 people joined Wednesday’s protests, including doctors, teachers, tax workers, ferry operators and air traffic controllers.
Banks and historic sites in Athens remained shut, with many shopkeepers expected to close up early so they could attend demonstrations.
Schools and government services also closed down, though buses were still running, reportedly to help ferry people to the protests.
“We can’t take it anymore – we are bleeding. We can’t raise our children like this,” Dina Kokou, a teacher, told Reuters news agency.
“We won’t submit to the troika!” and “EU, IMF out!”, “People, fight, they’re drinking your blood,” protesters chanted.
A march past parliament turned violent as anarchists wearing black balaclavas and carrying sticks threw petrol bombs and broken bits of concrete at riot police on Syntagma Square.
Images showed a policeman on fire as the bombs exploded.
The strike was called by the country’s two biggest unions, which between them represent half the workforce.
A survey conducted by the MRB polling agency last week found that more than 90% of Greeks believed the planned cuts were unfair and a burden on the poor.
Greece was given a 110 billion-euro bailout package in May 2010 and a further 130 billion euros in October 2011, backed by the IMF and the other 16 euro nations.
That money is paid in installments, but correspondents say the lenders are reluctant to stump up the latest slice, as they feel Greece has not made enough effort to meet its deficit-reduction targets.
Greece needs the new money to make repayments on its debt burden. A default could result in the country leaving the euro.
Greek trade unions have begun the first general strike since the country’s conservative-led coalition government came to power in June.
Wednesday’s 24-hour walkout is to protest at new planned spending cuts of more than 11.5 billion euros ($15 billion).
The savings are a pre-condition to Greece receiving its next tranche of bailout funds, without which the country could face bankruptcy in weeks.
Large anti-austerity demonstrations are also planned.
Greek trade unions have begun the first general strike since the country’s conservative-led coalition government came to power in June
Greece needs the next 31 billion-euro installment of its international bailout, but with record unemployment and a third of Greeks pushed below the poverty line, there is strong resistance to further cuts.
The government of conservative Prime Minister Antonis Samaras is also proposing to slash pensions and raise the retirement age to 67.
Workers from a diverse range of sectors are taking part in the strike, from doctors to air traffic controllers.
It was called by the country’s two biggest unions, which between them represent half the workforce.
A survey conducted by the MRB polling agency last week found that more than 90% of Greeks believed the planned cuts were unfair and a burden on the poor.
With demonstrations planned, many people fear a repeat of the violence that has hit the streets in previous protests.
Thousands of police have been deployed in the centre of Athens to prevent a flare-up.
Greece is currently trying to qualify for the next installment of its 130 billion-euro bailout, which is backed by the IMF and the other 16 euro nations.
The country was given a 110 billion-euro package in May 2010 and a further 130 billion euros in October 2011. That money is paid in installments, but correspondents say the donors are reluctant to stump up the latest slice, as they feel Greece has not made enough effort to meet its deficit-reduction targets.
Greece needs the next tranche of its bailout to make repayments on its debt burden. A default could result in the country leaving the euro.
Police have fired rubber bullets and baton-charged Spanish protesters attending a rally against austerity in Madrid.
The clashes occurred as protesters tried to tear down barriers blocking access to the parliament, reports said.
Metal barriers had been placed around the building to block access from every possible direction.
Demonstrators – known as Indignants – say “Occupy Congress” is a protest against the kidnapping of democracy.
Spanish media reported at least 20 people had been arrested and 13 injured in the clashes, as police tried to prevent demonstrators gaining access to Congress.
Police have fired rubber bullets and baton-charged Spanish protesters attending Occupy Congress rally against austerity in Madrid
Thousands of people had massed in Plaza de Neptuno square in central Madrid for the march on parliament.
But their route towards the parliament building’s main entrance is blocked off by metal railings, police vans and hundreds of Spanish riot police.
Spain’s provinces have piled pressure on the government with a possible new bailout request and an early election.
Andalucia is considering asking for a 4.9 billion euro ($6.3 billion) emergency credit line from the central government, a spokeswoman for the regional administration confirmed to Reuters news agency.
Three other regions – Catalonia, Valencia and Murcia – have already said they will seek emergency funds.
In Catalonia, President Artur Mas called an early election for 25 November, which correspondents say will be a de facto referendum on his demands for greater independence for the province.
There is real concern in Europe that Spain may need an international bailout going beyond the 100 billion euros ($125 billion) pledged by eurozone finance ministers in June to rescue its banks.
Tuesday’s demonstration was organized via social media sites and many young people turned out.
Buses were reportedly laid on to ferry demonstrators into the capital from the provinces.
One of the main protest groups, Coordinadora #25S, said the Indignants did not plan to storm parliament, only to march around it.
The Coordinadora #25S manifesto reads: “Democracy has been kidnapped. On 25 September we are going to save it.”
Pablo Mendez, an activist from the 15M Indignants movement, told the Associated Press: “This is just a powerful signal that we are sending to politicians to let them know that the Spanish bailout is suicide and we don’t agree with it, and we will try to prevent it happening.”
Another demonstrator, Montse Puigdavall, said: “I’m here because of the situation we are living in now, because of all the social cuts and rights that we have lost, that took a lot of hard work to achieve.
“So we are here because we’re determined not to lose them.”
Under Spanish law, people who lead demonstrations outside parliament that disrupt its business while it is in session may be jailed for up to one year, AFP says.
Clashes have broken out at previous rallies and marches against the cuts and at least 1,300 police are on duty at the Congress building.
The Spanish government is having to borrow heavily to cope with the effects of a collapse in property prices, a recession and the worst unemployment rate in the eurozone.
After nine months in government, Prime Minister Mariano Rajoy is still resisting pressure to request a bailout.
His government insists the 100bn-euro pledge does not constitute an international financial rescue.
If Mariano Rajoy does request a bailout, it may not happen before late October because of a regional election in his home province, Galicia.
Catalonia’s election decision comes days after Mariano Rajoy rejected a request from the wealthy but indebted region to run its own fiscal affairs.
The region is legally barred from holding an actual referendum on independence.
“It is time to take the risk,” Artur Mas told the regional parliament.
“If Catalonia were a state we would be among the 50 biggest exporting countries in the world.”
Riot police have ringed the Spanish parliament in Madrid as protesters gather for a march against austerity tagged “Occupy Congress”.
Metal barriers have been placed around the building to block access from every possible direction, correspondents say.
Indignants, as the protesters are known, say they are protesting at the “kidnapping” of democracy.
Spain’s provinces have piled pressure on the government with a possible new bailout request and an early election.
Andalucia is considering asking for a 4.9 billion euro ($6.3 billion) emergency credit line from the central government, a spokeswoman for the regional government confirmed for Reuters news agency.
Three other regions – Catalonia, Valencia and Murcia – have already said they will seek emergency funds.
Indignants, as the protesters are known, say they are protesting at the "kidnapping" of democracy
In Catalonia, President Artur Mas called an early election for 25 November, which correspondents say will be a de facto referendum on his demands for greater independence for the province.
There is real concern in Europe that Spain may need an international bailout going beyond the 100 billion euros ($125 billion) pledged by eurozone finance ministers in June to rescue its banks.
Thousands of people have gathered in central Madrid for the march to parliament, due to begin at 17:30.
Buses were reportedly laid on to ferry demonstrators into the capital from the provinces.
One of the main protest groups, Coordinadora #25S, said the Indignants did not plan to storm parliament, only to march around it.
The Coordinadora #25S manifesto reads: “Democracy has been kidnapped. On 25 September we are going to save it.”
Pablo Mendez, an activist from the 15M Indignants movement, told the Associated Press news agency: “This is just a powerful signal that we are sending to politicians to let them know that the Spanish bailout is suicide and we don’t agree with it, and we will try to prevent it happening.”
Another demonstrator, Montse Puigdavall, said: “I’m here because of the situation we are living in now, because of all the social cuts and rights that we have lost, that took a lot of hard work to achieve.
“So we are here because we’re determined not to lose them.”
Under Spanish law, people who lead demonstrations outside parliament that disrupt its business while it is in session may be jailed for up to one year, AFP notes.
Clashes have broken out at previous rallies and marches against the cuts and at least 1,300 police are said to be on duty at the Congress building.
The Spanish government is having to borrow heavily to cope with the effects of a property values collapse, a recession and the worst unemployment rate in the eurozone.
After nine months in government, Prime Minister Mariano Rajoy is still resisting pressure to request a bailout.
His government insists the 100 billion-euro pledge does not constitute an international financial rescue.
If Mariano Rajoy does request a bailout, it may not happen before late October because of a regional election in his home province, Galicia.
Catalonia’s election decision comes days after Mariano Rajoy rejected a request from the wealthy but indebted region to run its own fiscal affairs.
The region is legally barred from holding an actual referendum on independence.
“It is time to take the risk,” Artur Mas told the regional parliament.
“If Catalonia were a state we would be among the 50 biggest exporting countries in the world.”
The centre-right government in Portugal has agreed to look for alternatives to a social security tax rise a week after huge anti-austerity street protests.
Previously, it had planned to raise contributions next year from 11% to 18%, to meet the conditions of Portugal’s international bailout.
Prime Minister Pedro Passos Coelho announced his decision at a meeting with President Anibal Cavaco Silva.
Thousands of protesters chanted slogans outside the presidential palace.
The centre-right government in Portugal has agreed to look for alternatives to a social security tax rise a week after huge anti-austerity street protests
Some firecrackers and bottles were thrown and five arrests made at the protest, as the presidential state council met late into the night in the capital Lisbon.
Portugal was recently given an extra year to reduce its deficit, following the latest quarterly review by international lenders overseeing its 78 billion-euro ($101 billion) bailout.
Last Saturday, tens of thousands of protesters took to the streets of Lisbon and other Portuguese cities.
President Anibal Cavaco Silva called the meeting of his state council amid concern that Portugal’s main trump card in the eyes of foreign investors, its cross-party consensus on austerity, was in tatters.
A statement released afterwards said: “The council was informed of the government’s readiness to study, within the framework of the social bargaining process, alternatives to changes in the social security rate.”
It also said that differences between the two parties which make up the ruling coalition had been overcome, and they both remained committed to the bailout’s targets.
The weekly newspaper Expresso said the prime minister was preparing a new cut in holiday subsidies for workers, in place of the tax rise.
Police in Spain have fired rubber bullets to clear demonstrators in Madrid as a day of nationwide protests against spending cuts ended in unrest.
Protesters set alight rubbish bins as riot police charged them in the city centre, near the parliament building.
Seven people were arrested and at least six injured, officials said.
Earlier, tens of thousands of people held largely peaceful protests across Spain against the latest government austerity measures.
Public sector workers crowded the streets of Madrid, Barcelona and several other cities, chanting slogans against government “robbery”.
Tens of thousands of people held largely peaceful protests across Spain against the latest government austerity measures (Photo: Reuters)
Among those protesting were firefighters and police officers, as well as health and education workers.
“We have lived through bad times, but this takes the biscuit,” fireman Francisco Vaquero, 58, told the Reuters news agency.
The new 65 billion-euro ($80 billion) package of public sector wage cuts and tax rises were announced last week by Prime Minister Mariano Rajoy.
He said it was part of a deal with eurozone leaders to help rescue Spain’s troubled banks. Parliament ratified the measures on Thursday.
Earlier in the day, Germany’s parliament voted in favor of the 100 billion-euro bailout for Spain’s debt-laden banking sector.
Government austerity measures aimed at cutting Spain’s large deficit have prompted frequent protests, including one by miners against subsidy cuts last week.
At a debt auction on Thursday, Spain managed to raise 2.98 billion euros on the financial markets, but at the cost of sharply higher interest rates compared to an auction last month.
Spanish coal miners came to march in Madrid with helmets on their heads and the worried look of men with no future on their faces.
But they were clear that they would not give up on their life-or-death struggle for the future of their collieries.
“We’ll keep going and, if nothing happen, the fight will just get harder,” said Jórge Exposito, a helmeted miner from Mieres, northern Spain, as fireworks crackled and twitchy riot police stood by with shields and guns loaded with rubber bullets.
A tense standoff saw occasional police charges, rubber bullets and demonstrators hurling objects at police. At least 76 people were injured in clashes along Madrid’s central Castellana Boulevard, but the march on Madrid eventually ended with nothing more violent than a rousing sing-song.
The miners had brought with them the dust of Castile, the sun-baked central region of Spain that 200 of them had walked through on their 400 km, three-week march to reach the capital. Many had wept when they were greeted by crowds of supporters in Madrid.
Spanish coal miners came to march in Madrid with helmets on their heads and the worried look of men with no future on their faces
Thousands more came in buses that made the long trip from the northern regions of Asturias and Leon or the collieries of eastern Aragon and southern Puertollano.
Industry minister José Manuel Soria declined to meet the protesters and the ministry itself was protected with temporary fencing.
The miners had arrived in the hope that the centre-right government of Mariano Rajoy could be persuaded to return to a programme of subsidies to mining companies that has been dramatically chopped by 60% this year.
Instead, the prime minister devoted the morning to announcing a further austerity package to save the government €65 billion over the next two and a half years.
“All we are asking for is that they stick to the agreement,” said Isidro Castro, a former miner from the northern region of Leon.
“That is not so difficult.
“If the mining companies don’t get their subsidies this year, then there will be nothing to negotiate next year as they will have to close,” he said.
Celestino Duran, a miner from the Sant Lucía de Gordón coalfield, said: “Now they can see the support that we have, then maybe they will change.
“If the mine closes then the whole community will disappear. We saw that happen in the neighboring colliery at Cistierna. They closed it and a community of 2,000 people now has just 150 inhabitants.”
With Spanish unemployment at 24%, few miners believe they can find jobs elsewhere.
“I have two children. They are already taking away grants for school and university,” said Celestino Duran.
“If there are no jobs in the mine, what future will they have?”
Angelita Arias, from Santa Lucia de Gordon, said: “The trouble is that everyone depends on the mine and if it closes then the town dies. My daughter used to work for the regional television station, but she was laid off. Now she has opened a bar, but, if the mine closes, she will have to close that, too.”
Tens of thousands of people turned out on Tuesday night to greet the miners who, with their helmet lanterns ablaze, strode into the city’s central Puerta del Sol, famous as the centre of Spain’s indignado protest movement.
Now many see the miners as in the vanguard of the fight against austerity measures which were made still more drastic on Wednesday and threaten to deepen a double-dip recession.
But the government argues that Spain’s coal mines are making losses and European Union rules do not allow it to subsidize them much longer.
“We think they should keep the mines running because who knows what might happen to the supplies from other countries?” said Jorge Exposito.
“If they suddenly dry up, for whatever reason, Spain will need its own stock of coal.
“Mining is all we know. My wife, for example, is the daughter, granddaughter, sister, sister-in-law and wife of miners.”
But the chances that their children would also be miners are slim.
A new report by the aid watchdog Data shows that European debt crisis has led to cuts in government development aid to poor countries.
It is the first significant reduction in Europe-wide aid budgets for a decade.
The biggest percentage cuts in the year 2010/11 were made by two of the states worst affected by the debt crisis – Spain and Greece.
But overall European development aid was also down by 1.5%.
The report says the new figures “reveal that those bearing the brunt of Europe’s economic crisis include some of the world’s poorest people”.
“As austerity bites across Europe, we can now see the impact it is having on life-saving aid programmes,” it adds.
In the year 2010-11, Spain cut its aid budget – the sixth largest in Europe – by nearly a third.
Greece cut its much smaller programme by 40%, the Data study says.
A new report by the aid watchdog Data shows that European debt crisis has led to cuts in government development aid to poor countries
The report is published as part of a lobbying campaign by aid agencies as EU leaders begin negotiating the next seven year European budget.
Over the last decade the trend has been for aid cash to rise.
European countries account for just over half of all global official development assistance.
Many of them have been slowly nudging towards a United Nations anti-poverty target of 0.7% of national income spent on aid.
The Netherlands and some Scandinavian countries have exceeded this proportion.
By far the biggest three donors are Germany ($14 billion – 0.39% of national income), UK ($13.5 billion – 0.55%) and France ($12 billion – 0.42%)
One of the authors of the Data report, Adrian Lovett, said the countries that would be worst affected by any prolonged aid cuts were poor African states.
He said: “The countries we’re worried about are mostly in Africa – for example Mozambique, Tanzania and Malawi.
“At the moment they need aid and its saving lives on a daily basis.”
There’s a broad official consensus among aid agencies – and the western governments that often finance them – that development aid works.
But aid is not without its critics.
Some say it is wastefully distributed and can discourage poorly performing developing country governments from accepting their responsibilities.
The argument goes that if Medecins Sans Frontieres run the best hospitals in Haiti, for example, or Oxfam successfully digs the best water wells in Chad, why should the governments there bother?
Such critics would also argue that countries such as China and India – and the many African states which currently have strong economic growth rates – are not getting richer because of aid.
In many of these cases, the aid critics say, infrastructure investment, commodities exports or liberalization have been far more significant than aid.
Adrian Lovett counters these arguments with the example of Ghana.
“Ghana has in the past had a substantial amount of aid. That assistance has been well used through smart leadership at the national level and better coordination by the various donors.
“So Ghana is now on the brink of ending its dependence on development cash. That’s exactly the route we see many African countries potentially taking.”
But Adrian Lovett drew a distinction between emergency aid – for famine victims, for example – and longer term development assistance.
He said aid advocates such as himself wanted, ultimately, to do themselves out of a job.
“There’s always going to be international action around humanitarian crises. That is a natural human impulse.
“But we do want to see a day when we will help some countries and they will also help us in return in a relationship of equals.
“We want that rather than the donor client relationship we have seen in the past.”
Evangelos Venizelos, leader of Greek Socialist Pasok party, has announced that the country is set to go to the polls again after days of coalition talks failed to produce agreement on a new government.
A final round of talks on Tuesday morning broke up without a deal.
In elections on 6 May, a majority of Greek voters backed parties opposed to austerity plans demanded by the EU and IMF in return for two bailouts.
Greek president Karolos Papoulias will appoint a caretaker government on Wednesday.
Karolos Papoulias will meet all political leaders at 13:00 local time on Wednesday to put in place an interim government until the new vote, which is expected to take place on 10 or 17 June.
“Unfortunately, the country is heading again toward elections,” Evangelos Venizelos told reporters after the talks on Tuesday.
The euro fell sharply on the news, tumbling from $1.2842 to $1.2771 shortly after 13:15 GMT – its lowest value since 18 January.
Greek shares also fell before recovering slightly.
Greek parliamentary results
The leader of the right-wing Independent Greeks Party, Panos Kammenos, said: “The pro-bailout parties would prefer a government which will further torment the Greek nation, rather than finding a solution. They have offered a proposal that is too rigid for me to accept.”
European leaders say that they will cut off funding for Greece if it rejects the bailout agreed in March.
This would mean effective bankruptcy for Greece and its all but certain exit from the European single currency, analysts say.
German Finance Minister Wolfgang Schaeuble again ruled out amending the bailout agreement.
“The people in Greece must know that what we have agreed for Greece and have set in train is an entirely unusual effort,” he said after talks in Brussels on Tuesday.
Polls suggest the leftist Syriza bloc, which came second in the 6 May vote and rejects all further cutbacks, could become the largest party after a new election.
Syriza wants to renegotiate the bailout package but also wants to keep Greece in the euro.
Greece must also decide whether to redeem an outstanding bond worth 436 million Euros ($558.67 million) which matures on Tuesday.
A Greek official, speaking on condition of anonymity, told the Associated Press that Athens would pay off the debt on schedule, thereby avoiding a default.
The chairman of the eurozone group of finance minister, Jean-Claude Juncker of Luxembourg, said on Monday he wanted Greece to remain in the single currency but warned that Athens must keep to its commitments.
Pasok and New Democracy, which signed up to the bailouts and had previously dominated Greek politics for decades, saw their combined share of the vote drop from about 77% to about 33% on 6 May.
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