'It's the death of the middle class'

A protester throws a stone at riot police during clashes in Athens in which one demonstrator died. Photo / AP

Tens of thousands of demonstrators besieged the Greek Parliament for a second day yesterday as MPs gave their final approval to the latest package of austerity measures including pay cuts, tax increases, job losses and other changes demanded by international creditors in return for further loans to avert bankruptcy.

Eddies of tear gas drifted into streets around Syntagma Square in front of Parliament where youths fought riot police and other demonstrators.

But the most notable feature of the largely peaceful rallies this week is that they include large numbers of middle-class professionals such as doctors, teachers and pharmacists as well as manual workers like garbage collectors and dock workers.

One man died as the battles erupted outside the Parliament in Athens. The dead man was identified by Greek media as a middle-aged trade unionist.

"The demonstrator died of a heart attack," said Deputy Citizens Protection Minister Manolis Othonas.

"The reason you see this determination on the part of the demonstrators is the result not of rage but desperation," said Simos Kedikoglou, an MP from the opposition New Democracy party.

"People simply can't make ends meet. We are talking about the death of the middle class in Greece."

This sense of desperation was confirmed by Elleni Kalouri, a demonstrator. She is a 35-year-old school teacher specialising in mathematics and had seen her salary cut from €1200 a month to €900.

"I can no longer afford to pay the rent on my apartment so I am staying with a friend. We are becoming poor and it is not fair," she said.

Another demonstrator, wearing a white face mask against tear gas, was Vassilis Stathousis, the president of the rail workers union, who said he expected the bill to be passed by Parliament, though only barely.

In the end, the struggling Government of Socialist Prime Minister George Papandreou won the parliamentary vote with 154 votes in favour and 144 against, despite the decision by one deputy in the ruling party to oppose one article in the package.

Stathousis said "privatisations are expected as the IMF traditionally takes all national property". The little-used but costly railway system is mentioned frequently as a prime candidate to be broken up and sold off.

The changes on which Parliament voted envisage a new pay system for 700,000 civil servants, further cuts in public sector wages, cuts in pensions and the suspension of wage bargaining. In addition, the tax-free threshold is to be lowered from €8000 to €5000, and 30,000 public sector workers to be suspended will see their wages cut by 60 per cent and face lay-offs.

"You have to approve the law, with all its clauses," Finance Minister Evangelos Venizelos told Parliament. "This is not a game. If anybody thinks they can test how much wiggle-room we have, they're mistaken."

There were clashes at the end of the rallies yesterday, which were coordinated with a 48-hour general strike. The skirmishing in front of Parliament was largely initiated by young men in black who are masked and claim to be anarchists, but protest leaders claim they are tolerated by the riot police in the belief that violence will discredit the demonstrations as a whole. At least 16 people were injured yesterday.

After the austerity package is implemented, public service workers will have seen their average income cut by 40 per cent over two years.

Highly educated young Greeks see no prospects at home and small businesses are collapsing because of higher taxes and a fall in demand.

Kedikoglou said the Government was enfeebled by its unpopularity - support for the ruling Pasok party has fallen to 15 per cent.

"The Government is in a state of shock and does not know what to do except to agree to everything the [EU-IMF] Troika asks," he said. "It has no democratic legitimacy because it won the election in 2009 saying there was enough money for everybody."

On the bill

* New pay and promotion system covering all 700,000 civil servants.

* Further cuts in public sector wages and many bonuses scrapped.

* About 30,000 public sector workers suspended, wages cut to 60 per cent and face lay-off after a year.

* Wage bargaining suspended.

* Monthly pensions above €1000 ($1735) cut 20 per cent.

* Other cuts in pensions and lump-sum retirement pay.

* Tax-free threshold lowered to €5000 a year from €8000

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