Greek rescue

Greece's parliament is to vote on controversial new austerity measures on Thursday, a day after three people died in riots against the tough budget cuts and tax hikes.

The Socialist government, with its majority in the 300-seat parliament, expects to easily pass the bill. The strict new measures, which include new taxes and cuts to wages and pensions are expected to save the government 30 billion euros ($38.3 million).

The measures must be approved for the debt-ridden country to receive a three-year 110-billion-euro rescue package from the International Monetary Fund (IMF) and other eurozone members. Greece needs this cash infusion by May 19, the day it is expected to pay 8.5 billion euros of maturing bonds on its debt, which it says it would not be able to pay without the bailout.

International support from IMF and ECB

This week, Germany announced it would contribute 22.4 billion euros ($30 billion) to the aid package. The lower house of the German parliament, the Bundestag, is expected to pass the bailout on Friday, ahead of a meeting of the IMF board on Sunday.

The European Central Bank (ECB) met in Lisbon on Thursday to discuss Greece’s debt crisis, as European leaders prepared for a special eurozone summit in Brussels on Friday.

The ECB held its main interest steady at a record low of one percent and the bank's President Jean-Claude Trichet insisted that a Greek default was "out of the question."

However, the ECB governing council did not discuss buying Greek government bonds. Amid fears the debt crisis could spread to Portugal, Trichet insisted that Athens and Lisbon were not in the same fiscal situation.

For the eurozone, Trichet predicted moderate but uneven growth amid "high uncertainty" for 2010.

'A black day for democracy'

More than 100,000 people took to the streets on Wednesday to protest against the proposed austerity measures. Masked rioters clashed with police, attempted to storm parliament and torched buildings and cars, in what Civil Protection Minister Michalis Chrisohoides called a "black day for democracy."

Three people, including a pregnant woman, died when they were trapped in a burning bank torched by rioters in central Athens. At least 45 people, including 29 police officers, were injured.

The riots were the worst to hit the country since the police shooting of a teenager in 2008.

Protests also flared up in the port cities of Thessaloniki and Patras, as well as the city of Ioannina and Iraklio on the southern Mediterranean island of Crete. The protests came as Greece was paralyzed by a 24-hour nationwide strike that grounded flights, halted trains and ferries and shut down schools, hospitals and government services.

Bank workers went on strike on Thursday to protest against the death of their three colleagues, and unions were planning rallies later in the day outside of parliament.

The government, however, has refused to budge. Prime Minister George Papandreou has defended the measures, saying his government will do everything possible to prevent the country from going bankrupt.

"We are prepared to pay the heavy political cost," Finance Minister George Papaconstantinou told parliament during a debate on the austerity bill. "We will not take a single step backwards."

cmk/AP/dpa/Reuters
Editor: Chuck Penfold