Greek strikers hurl yoghurt and stones at Athens police

Police have been firing teargas in an effort to disperse the crowd

Greek police have fired teargas at protesters outside parliament as MPs prepare to debate new austerity measures required for the EU and IMF bail-out package.

Demonstrators around Syntagma Square in Athens responded by throwing yoghurt and stones.

Thousands are taking part in a general strike, the third in Greece this year.

Ports, public transport and banks are badly disrupted as the main public- and private-sector unions go out on strike.

Prime Minister George Papandreou is seeking support for a new austerity programme of 28bn euros (£24.6bn; $40.5bn) in cuts to take effect from 2012 to 2015.

State-run companies have also joined the walkout, while hospitals are only offering emergency care. However, airports are operating normally after air traffic controllers called off their strike.

“Start Quote

For all the leftist iconography plus the presence of that by now familiar demographic, the Facebook youth, or ‘graduates with no future’, this thing has gone beyond left and right – it’s clear that for many people it is the Hellenic republic versus the rest of the world”

Paul MasonEconomics editor, Newsnight

• Greeks versus the world in Athens austerity protests

A top credit agency has cut Greece’s rating, making it the least credit-worthy nation out of 131 countries it monitors.

The Greek government said the downgrade by Standard & Poor’s – from B to CCC – ignored its efforts to secure funding.

In order for the next tranche of rescue loans to go through, parliament must adopt the new austerity plan by the end of June.

‘Fight the battle’

Police thwarted protesters who were attempting to blockade parliament and stop MPs getting in for the debate.

They sealed off the roads leading to Syntagma Square and created a pathway for deputies.

The Greek demonstrators are calling themselves the «indignants», linking themselves to Spanish anti-austerity protesters who set up camps in Madrid and Barcelona until they were removed by police last month.

The square is awash with Greek and Spanish flags, as well as banners reading «Resist» and the battle cry from the Spanish civil war, «No pasaran» (they shall not pass), the AFP news agency reports.

Greek bail-out timeline

• May 2010: EU and IMF agree bail-out package to prevent Greece defaulting on its debts; in return, Greece agrees to make 30bn euros of budget cuts over the next three years
• February 2011: EU and IMF experts tell Greece it must make further cuts to keep its recovery on track
• April 2011: EU figures reveal Greek deficit revised up to 10.5%, worse than previously thought
• May 2011: Greece begins privatisation programme but is warned the IMF may not release more funds because Athens cannot guarantee it will remain solvent for the next 12 months
• 29 June 2011: Deadline for Greece to agree new austerity package

Mr Papandreou faces the risk of a revolt in his own Pasok party over the plans.

One MP defected from the party on Tuesday, leaving it with only 155 of the chamber’s 300 seats.

«You have to be as cruel as a tiger to vote for these measures. I am not,» George Lianis, a former sports minister, said in a letter to parliament’s speaker announcing his departure from the parliamentary group.

At least one other Pasok MP has threatened to vote against the new programme of cuts and privatisation of state assets.

Another 14 MPs are wavering in their support for the austerity plan, our correspondent says.

Meanwhile, eurozone finance ministers have failed to agree on how to make private creditors contribute to a possible second Greek bail-out.

Ministers meeting in Brussels continued their discussions late into the night on Tuesday on ways of making private bondholders share the cost of a second rescue package without throwing financial markets into turmoil.

As a result of their failure to reach a deal, the cost of insuring Greek debt against default shot to an all-time high.

The Greek government has appealed for consensus over its proposals, which would see 6.5bn euros (£5.7bn; $9.4bn) in tax rises and spending cuts this year.

«Every Greek, particularly the new generation, demands that we fight the battle with all our power, a battle to avoid a disastrous bankruptcy which will undermine the future of the country,» government spokesman George Petalotis told reporters.

«We are fighting the battle to serve the common good, in the most crucial moment in the country’s modern democracy.»

In a sign of possible contagion from the Greek crisis, credit rating agency Moody’s said it might downgrade the three largest banks in France because of their exposure to Greek debt.

Share prices for BNP Paribas, Credit Agricole and Societe Generale all fell as a result.

France appealed for calm, saying it opposed a Greek restructuring which could entail write-offs for private banks.

«The French position is voluntary – no restructuring, no credit event and in line with the ECB,» government spokesman Francois Baroin told reporters in Paris.

The EU and IMF are demanding the measures in return for the release of another 12bn euros in aid next month which Athens needs to pay off maturing debt

http://www.bbc.co.uk/news/world-europe-13773148