Austerity protests

Trade unions in Greece on Friday were preparing further strikes opposing government spending cuts designed to help the country control its runaway debts. Police and protesters clashed outside the finance ministry in Athens on Thursday evening.

Officers fired tear gas to disperse hundreds of protesters - many of whom work in the public sector. Teachers stopped work and radio technicians launched a 48-hour strike, halting news broadcasts.

Greek union officials said the International Monetary Fund asked Athens to raise sales taxes, scrap bonuses in the public sector, and accept a three-year pay freeze.

"The immediate emergency measures will be a strong bridge to cross over to great changes, secure the life of every citizen, and provide dynamic growth in a more just society," Greek Prime Minister George Papandreou said on Thursday, trying to garner public support for the severe austerity measures.

The government in Athens needs international aid in the coming days to avoid defaulting on a May 19 deadline to repay nine billion euros ($12 billion) in maturing debts. But to get this money, it must satisfy the international community that it's making the changes necessary to eventually repay these fresh loans. Meanwhile, its cash-strapped populace is questioning whether spending cuts will stimulate growth in the country.

German doubts persist

Parts of Germany's opposition Social Democrat party are still skeptical about an international rescue for Greece, and the former SPD leader Kurt Beck is threatening to try and veto the law in the upper house of Germany's parliament, the Bundesrat.

"The condition for acceptance is that the draft law is not just a dry approval of a loan, but also contains lasting, concrete measures," Beck, the state premier of Rheinland Palatinate, told the Rheinischer Post newspaper.

These measures should include "banks playing their part, and a containment of currency speculation," Beck said.

Beck's position goes against the grain of most of the opposition in Germany, who have largely agreed to support the Greek rescue. However, the government needs near unanimous consent in order to push the legislation through quickly as an emergency measure.

The SPD's parliamentary leader, Frank-Walter Steinmeier, believes German politicians have no choice but to support the measures.

"Now we have to act," Steinmeier said. "The German government has already waited too long." Steinmeier also said the Greek problems showed that monetary union can only function properly when coupled to unified eurozone policies on taxation, the economy and financial issues.

In defense of the euro, not of Greece

The German government is promising to be strict with Greece, setting tough conditions for any financial aid, but it also says Athens must receive loans that could total up to 120 billion euros over three years.

"We have to go down this route," German Finance Minister Wolfgang Schaeuble said on public television. "We are not defending Greece, we are defending the stability of our currency."

As well as rushing to secure domestic approval of the Greek rescue, the German government is also trying to help shape the international agreement; Wolfgang Schaeuble suggested that Sunday might be the pivotal day for these talks.

Meanwhile, EU Commission President Jose Manuel Barroso has said he is confident a deal will be reached, and that it will help prevent other eurozone countries from falling into similar debt problems.

"There is no doubt that Greece's needs will be met in time," Barroso told reporters in Beijing. "I am confident that the talks will be concluded very soon, meaning [the] next days."

msh/Reuters/AFP/dpa
Editor: Rob Turner