Greece braced for weekend of unrest as cash crunch nears

By Mehreen Khan 01 May 2015

Labour Day brings Greek politicians onto the streets to protest against austerity demanded by the country's creditor powers

Local authorities are resisting measures to transfer their cash reserves to the government

Greece was braced for the biggest weekend of civil unrest since its radical Left government assumed power, as tensions over the country's future in the Eurozone are set to reach breaking point in May.

Athens was gripped by a throng of anti-austerity protests on Friday, to mark the Labour Day holiday across the continent.

Several members of the ruling Syriza party, including embattled finance minister Yanis Varoufakis, took part in rallies, repeating they would not forsake their people and cower to the demands of creditors.

In a veiled barb aimed at his paymasters, a defiant Prime Minister Alexis Tsipras tweeted: "We will prevail in our struggles to bolster and protect our rights, our democracy and our dignity".

Labour market reforms have emerged as one of the main stumbling blocks in Greece's three-month bail-out impasse, as European powers have pushed the Leftist regime to reverse its promises to raise the minimum wage.

But Greece's Labour minister Panos Skourletis said the policy would go ahead, calling it a "deep and immovable red line" for the government.

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In a taste of the domestic turmoil that could ensue should the state withhold funds from its citizens, hundreds of pensioners in Athens were forced to queue outside banks on Thursday, as pensions payments were temporarily delayed.

The government is scrambling to find the funds it needs to avoid defaulting on the International Monetary Fund on May 6, when it is due to repay a €200m loan.

Panic over the pensions payment "suggests that this comparably small IMF payment will be a headache to scrape together and underlines that Greece might well struggle to stay financially afloat much beyond May," said Robert Kuenzel of Daiwa Capital Markets.

Greece has received no bail-out cash since August last year, as international lenders have squeezed economic reforms and imposed stringent austerity on the debt-laden country.

Talks over securing the funds continued in Brussels on Friday, ahead of a vital meeting of Eurozone finance ministers on May 11.

Despite the prospect of an imminent and unprecedented default on its international lenders, Europe's financial chief Jeroen Dijsselbloem said it remained "too early to say if a turning point had been reached".

"In the end we only look at the results and we’re not that far yet," said Mr Dijsselbloem.

With the country teetering on the edge of bankruptcy, Athens has been forced to raid the coffers of its local government bodies to plug its cash shortfall. But the confiscation measures have been widely resisted by the country's municipalities, who are seeking a legal injunction against the transfers of their excess reserves to the Bank of Greece.

Greek courts are also due to decide whether cuts made to its state pensions while under a bail-out programme, breached the country's constitution.

The ruling Syriza party has pledged to raise provision for the poorest, after pensions were slashed by €3.5bn-€4bn under previous governments, on the demands of the Troika.

Greece has also sought Second World War reparations from Berlin for crimes carried out by the Third Reich. Germany's president, Joachim Gauck supported the claims on Friday, insisting it was the "right thing to do for a history-conscious country like ours”.

#Syriza poster on the streets of #Athens. Says 'We will not be blackmailed, not one step backwards.' #Greece

Greece braced for weekend of unrest as cash crunch nears - Telegraph