Day of rage in Greece as more stringent cuts loom

Police fired stun grenades and tear gas at protesters yesterday as tens of thousands poured into the streets of Athens as part of a nationwide strike to challenge a new round of austerity measures that are expected to cut wages, pensions and healthcare once again.

Dozens of youths, some masking their faces with helmets and T-shirts, hurled Molotov cocktails and rocks at police who fired back in an effort to scatter the angry crowds around the parliament building. More than 50,000 people are believed to have participated in the mass walk-out in Athens alone.

Hospital doctors, pensioners, teachers and shopkeepers were among the demonstrators that participated in over 60 rallies throughout the debt-ridden country. Even the president of Greece's police officers participated in the trade union march in Athens alongside uniformed colleagues from the fire department and coastguard.

"We don't owe [money] to anyone, bring back what's stolen," was one of the chants that could be heard in Athens, echoing the violent resentment of many Greeks against politicians and their purported embroilment in tax evasion and corruption scandals.

Evangelos Meimarakis, the Parliament Speaker and previous conservative New Democracy minister, temporarily suspended his duties earlier this week after allegations of money laundering. The Finance Ministry's Fraud squad is investigating at least 30 politicians and public workers for possible corruption charges, including two other former conservative ministers. All three former ministers deny the accusations.

Meanwhile, the government has been negotiating with its political allies and international lenders to hammer out a minimum of €11.6bn (£9.2bn) worth of cuts mainly drawn from pensions and wages. Cuts in healthcare and defence are also planned. But delays in agreeing over the exact nature of the cuts is holding up the disbursement of a critical €31.5bn (£25bn) loan instalment that will help Greece stay afloat and inject cash into the economy.

A Finance Ministry official told The Independent that €23.5bn (£18.7bn) of the anticipated tranche has been earmarked to recapitalise banks that have been unable to approve loans, paralysing the system. Part of the rest will also be used to repay some of the state's debt to private contractors and other organisations.

Giorgos Loukas, a former electrician, said austerity measures had reduced his monthly pension from €1,100 (£875) to €750 (£600) . "We're being stripped of everything we have," the 66-year old said. Both his wife and daughter are unemployed, and all three survive on his income. "Where is European solidarity? We're being insulted as a nation but I will never beg at soup-kitchens for food – my dignity is all I have left."

Greece has been told to implement a succession of spending cuts and structural reforms in an effort to bring down its massive debt in exchange a bailout of nearly €200bn (£160bn). But many experts warn that the measures are only making the recession deeper. One in two youths is out of a job while thousands of educated and skilled professionals are fleeing the country in search of opportunities abroad.

"I feel my country is on auction and we're just an economic experiment," said Dimitris Palles, 49, a physics researcher at the National Hellenic Research Foundation. Mr Palles, 49, who's seen his annual salary drop from €24,000 (£19,000) to €19,500 (£15,500). "No level of political mismanagement can justify the pain we're being asked to endure," he says.

Greece's international creditors were also reported to be loggerheads yesterday over how to solve Athens' debt crisis, as the International Monetary Fund (IMF) demanded that European governments write off some of the Greek debt they hold. According to Reuters, tensions between Greece and the "troika" of European Union, European Central Bank and IMF have escalated as the IMF pushes to restructure Greek debts to public-sector foreign creditors, whereas EU leaders would rather give Athens more time to meet the demands of its bailout.

Public healthcare is one of the sectors that has been gravely affected by the crisis in Greece. Chemists and pharmaceutical companies have stopped giving drugs on credit to medical insurers saying they haven't been paid in months by the state.

Meanwhile, Greece's power company cut the electricity at a kidney hospital on the island of Aegina for several hours on Tuesday while the patients were undergoing blood dialysis, forcing the centre to rely on its generator.

ECONOMY FEARS SEND SPAIN'S RATES SOARING

Concern about the Spanish economy drove a sharp rise in the interest rates that investors charge to lend money to Madrid yesterday, increasing fears that eurozone crisis was worsening

The yield on the country's 10-year bonds topped 6 per cent for the first time since early this month, reviving speculation that Madrid would have to seek a national bailout from its European partners.

The high rates come in a crucial week for the Spanish economy, with the government due to unveil its draft budget for 2013 today, and an audit of Spain's banks expected to reveal how much money will be needed to prop up the country's ailing lenders on Friday.