Violence offers glimpse of Greece's reform challenge

…150 shops were looted in the capital and 48 buildings set ablaze…

… Vandalism, violence and destruction have no place in a democratic country and won't be tolerated…

… The EU and IMF say they have had enough of broken promises…

By Renee Maltezou and Harry Papachristou

ATHENS | Mon Feb 13, 2012 3:41am EST

(Reuters) - Greeks swept rocks and broken glass from the streets of Athens on Monday after a night of violence that gave lawmakers a taste of the challenge they face in implementing a deeply unpopular austerity bill demanded by the country's foreign lenders.

Firefighters doused the smoldering remains of several buildings, set ablaze by hooded youths during protests against the package of pay, pension and job cuts adopted by parliament on Sunday after 10 hours of debate.

The bill was the price of a 130 billion euro ($172 billion) EU/IMF bailout to save Greece from a chaotic default next month.

The government of Prime Minister Lucas Papademos must come up with a further 325 million euros in budget savings to satisfy euro zone finance ministers, scheduled to meet on Wednesday, and political leaders must commit to implementing the measures even after an election penciled in for April.

Papademos' government saw 43 deputies rebel in what may be an indication of the difficulties in ensuring politicians stick to the program, which include a 22 percent cut in the minimum wage -- a package critics say condemns the economy to an ever-deeper downward spiral.

Police said 150 shops were looted in the capital and 48 buildings set ablaze. Some 100 people - including 68 police - were wounded and 130 detained, a police official said on Monday.

There was also violence in cities across the country, including Greece's second-largest city Thessaloniki and the islands of Corfu and Crete, said the official, who declined to be named.

Greeks were shocked at the burnt buildings that included the neo-classical home to the Attikon cinema dating from 1870.

"We are all very angry with these measures but this is not the way out," said Dimitris Hatzichristos, 30, a public sector worker surveying the debris.

Altogether 199 of the 300 lawmakers backed the controversial bill. The 43 who rebelled were immediately expelled by their parties, the socialists and conservatives.

"Night of terror inside and outside the parliament," conservative daily Eleftheros Typos wrote on its front page.

Asian shares and the euro gained modestly on Monday and MSCI's broadest index of Asia Pacific shares outside Japan edged up as much as 0.3 percent.

"SHORT-TERM SACRIFICES"

Papademos, a technocrat brought in to get a grip on the crisis, denounced the worst breakdown of order since 2008, when violence gripped Greece for weeks after police shot a 15-year-old schoolboy.

"Vandalism, violence and destruction have no place in a democratic country and won't be tolerated," he told parliament on Sunday as it prepared to vote.

But he said that imposing the austerity on a nation that has already endured several years of cuts would be tough.

"The full, timely and effective implementation of the program won't be easy. We are fully aware that the economic program means short-term sacrifices for the Greek people," Papademos said.

Greece needs the international funds before March 20 to meet debt repayments of 14.5 billion euros, or suffer a chaotic default that could shake the euro zone.

"It was just as hard for us to say 'Yes' as it was for fellow members of the parliament to say 'No' ... I said 'Yes', because 'No' would be catastrophic," Yannis Magriotis, Deputy Infrastructure Minister (from PASOK), told Mega TV on Monday.

Overnight, a Reuters photographer saw buildings engulfed in flames and huge plumes of smoke rose in the night sky outside parliament.

"We are facing destruction. Our country, our home, has become ripe for burning, the centre of Athens is in flames. We cannot allow populism to burn our country down," conservative lawmaker Costis Hatzidakis told parliament.

The air in Syntagma Square outside parliament was thick with teargas as riot police fought running battles with youths who smashed marble balustrades and hurled stones and petrol bombs.

Terrified Greeks and tourists fled the rock-strewn streets and the clouds of stinging gas, cramming into hotel lobbies for shelter as lines of riot police struggled to contain the mayhem.

On the streets of Athens many businesses were ablaze, including a building housing the Asty, an underground cinema used by the Gestapo as a torture chamber during World War Two.

ENOUGH

The EU and IMF say they have had enough of broken promises and that the funds will be released only with the clear commitment of Greek political leaders that they will implement the reforms whoever wins the April election.

The bill sets out 3.3 billion euros ($4.35 billion) of extra budget cuts for this year alone.

It also provides for a bond swap to ease Greece's debt burden by cutting the real value of private-sector investors' bond holdings by some 70 percent. Greece would have missed a February 17 deadline to offer a debt "haircut" to private bondholders if the vote had not been passed.

Many Greeks believe their living standards are collapsing already and the new measures will deepen their misery.

"Enough is enough!" said 89-year-old Manolis Glezos, one of Greece's most famous leftists. "They have no idea what an uprising by the Greek people means. And the Greek people, regardless of ideology, have risen."

Glezos is a national hero for sneaking up the Acropolis at night in 1941 and tearing down a Nazi flag from under the noses of the German occupiers, raising the morale of Athens residents.

(Additional reporting by Karolina Tagaris, Dina Kyriakidou, Ingrid Melander in Athens and Tatiana Fragou; Writing by David Stamp)