Greece heads for reshuffle amid strikes, EU diktat

Greece's ruling coalition was headed for an emergency reshuffle on Friday with the country gripped by a two-day general strike and violent protests in Athens as a chaotic debt default looms closer. The far-right LAOS party that is part of the coalition said it would not support further austerity cuts demanded by the EU, the IMF and the European Central Bank, and three of its members in government later submitted their resignations. A government source noted that debt dissenters would be replaced but did not specify whether this would happen at a cabinet meeting expected later on Friday. "Whoever does not agree with the government policy will be replaced," the source told AFP. The deputy foreign minister, a socialist, has also resigned. Greece was explicitly told by its eurozone partners this week that approval of the austerity measures is a condition for the release of further loans to Greece under a 130-billion-euro ($171-billion) bailout pending since October. The country risks bankruptcy on March 20, when it must repay nearly 14.5 billion euros ($19 billion) in maturing debt, if it does not get financial assistance. The far-right has 16 deputies in the 300-seat parliament and although several lawmakers from other parties have also declared their opposition to the new cuts, the other two coalition parties have enough support to secure passage on Sunday. "We are not going to vote," LAOS leader George Karatzaferis told a news conference earlier, adding: "Humiliation was imposed on us. I do not tolerate this. And I do not allow it, no matter how hungry I might be." Blasting Berlin's line on debt, Karatzaferis said: "Greece must not and cannot be outside the EU. But it can do without the German boot." Prime Minister Lucas Papademos summoned the cabinet meeting on Friday as clashes erupted on the sidelines of union demonstrations against the new cuts, which caused a junior labour minister to resign on Thursday. Television footage showed youths in hoods and motorcycle helmets breaking up masonry around central Syntagma Square and throwing stones at police, who responded with bursts of tear gas. At least one person was injured. Eurozone finance ministers on Thursday delayed a decision on a new bailout, giving Greek officials less than a week to meet tough conditions in exchange for fresh aid. The ministers want Greek lawmakers to formally approve the measures, which include additional structural spending cuts of 325 million euros for 2012. They also want a written pledge from coalition leaders that they will implement the reforms, Eurogroup chief Jean-Claude Juncker said in Brussels. If those conditions are met, the Eurogroup would meet again on Wednesday, he said. The hard line in the new five-day deadline from the eurozone was clear. "The Greeks have to help themselves. There is no other way," French central bank governor Christian Noyer told Europe 1 radio. Greek unions went ahead with the general strike against what they describe as "barbaric" wage and pension cuts. This backs up a 24-hour general strike held three days ago. More protests are planned for the weekend. The measures they are trying to sign and ratify will be the tombstone of Greece," said Nikos, one demonstrating pensioner. "The people must take matters into their own hands," added Constantinos Amonas, a plastics factory worker. "They should not wait, they should not be fooled by the political parties," he said. Greece on Thursday had announced a last-minute general accord among the coalition parties on alternative ways of finding budget savings demanded by the European Union and International Monetary Fund. But it turned out that in the eyes of eurozone finance ministers there was still a shortfall and they were not prepared to accept this "general agreement" by Greek politicians. Instead the eurozone wants cast-iron commitments on the numbers. Financial markets reacted negatively to the latest developments, with stock exchanges falling -- the Athens bourse slumped 3.23 percent. The tough position by European leaders echoes a change of tone in comment which until now had held that a departure of Greece from the eurozone could not be contemplated. Greek Finance Minister Evangelos Venizelos told reporters in Brussels Thursday that Greece's place in the eurozone was in the hands of the country's conservative party, the senior coalition party alongside his Socialists. "It must decide -- if they want (Greece) to stay in the eurozone, they have to say so clearly. If they don't, then they have to say that clearly as well," Venizelos said.