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Tens of thousands protest in Greece as Angela Merkel says austerity will pay off

As German Chancellor, Angela Merkel, made her first trip to Greece since 2007, she was greeted by angry demonstrators in the country's capital city. Greeks came out in droves to protest the visit, as many Greeks believe Germany to be a central player behind the austerity measures taken by the debt-stricken country. CNBC's Carolin Roth reports.

Tens of thousands of angry Greek protesters filled the streets of Athens on Tuesday to greet German Chancellor Angela Merkel, who offered sympathy but no promise of further aid on her first visit since the euro crisis erupted three years ago.

As police fired tear gas and stun grenades to halt angry crowds chanting anti-austerity slogans and waving swastika flags, Merkel's host, Prime Minister Antonis Samaras, welcomed her as a "friend."

Blamed by many Greeks for imposing draconian budget cuts in exchange for aid, Merkel reaffirmed Berlin's commitment to keep the debt-crippled Greek state inside Europe's single currency.

"I have come here today in full knowledge that the period Greece is living through right now is an extremely difficult one for the Greeks and many people are suffering," Merkel said during a joint news conference with Samaras just a few hundred yards from the mayhem on Syntagma Square, outside parliament.

"Precisely for that reason I want to say that much of the path is already behind us," she added, offering a public display of support to Samaras's three-month-old government on her first visit to Greece since 2007.

Reuters

Police try to disperse protesters reacting to the visit of Germany's Chancellor Angela Merkel in Athens on Oct. 9.



She tried to reassure her hosts that their reforms would eventually pay off, but also made clear that Greece, which has seen its unemployment rate surge to nearly 25 percent and economic output shrink by a fifth, would not solve its problems overnight.

Angela Merkel greeted warmly by prime minister, but not by Greeks

Samaras promised to implement economic reforms necessary to restore confidence: "The Greek people are bleeding but are determined to stay in the euro," he said.

"All of those who made bets that Greece would fail... will lose," Samaras added, according to Spiegel.

On the other side of the parliament building, tens of thousands of demonstrators defied a ban and gathered to voice their displeasure with the German leader, whom many blame for forcing painful cuts on Greece in exchange for two European Union/International Monetary Fund bailout packages worth more than 200 billion euros ($260 billion).

Greek police fired teargas and stun grenades when protesters tried to break through a barrier to reach the cordoned-off area where Merkel and Samaras were meeting. Some demonstrators pelted police with rocks, bottles, paint bombs and sticks.

Four people dressed in World War II-era German military uniforms and riding on a small jeep, waved black-white-and-red swastika flags and stuck their hands out in the Hitler salute. Some protesters carrying banners bearing slogans such as, "No to the Fourth Reich," the BBC reported.  

Other banners read "Merkel out, Greece is not your colony" and "This is not a European Union, it's slavery."

Reuters

Police try to disperse protesters reacting to the visit of Germany's Chancellor Angela Merkel in Athens on Oct. 9.

Some 6,000 police officers were deployed, including anti-terrorist units and rooftop snipers, to provide security during the six-hour visit. German sites in the Greek capital, including the embassy and the Goethe Institute, were under special protection. This security operation was one of Athens' biggest in a decade, the BBC reported.

Among the peaceful protesters, teacher Christina Vassilopoulou, 37, told AFP that despite having a doctorate, she only makes 900 euros (about $1,160) a month.

"We have children that go hungry and most of the parents are unemployed," she told the AFP news agency, the BBC said.

Constantine Spiliagopoulos, a lawyer who was also taking part in the protests said Merkel was "one of the main reasons that Greece's low income and the working classes of Greece are under attack," according to the BBC.

"That is why we must make our presence felt, we must shout against these polices and show that we will do everything so that they do not continue," she added.

Constantinos Siathas was more hopeful, telling The Associated Press: "I think most people, at least those who think and don't act based on feelings or utopian ideas, are pleased and are expecting a lot from Mrs. Merkel's visit."

Yiannis Bournos, a spokesperson for the leftist Syriza party, criticized Merkel's visit, telling the BBC that Greeks were "frustrated and enraged because they clearly understand that Mrs. Merkel's visit is just a theater play for the political support of a collapsing coalition."

Aid money "urgently needed"
After steering clear of Greece for the past five years, Merkel decided to visit now for several reasons.

She was keen to show support for Samaras, a fellow conservative, as he struggles to impose more cuts on a society fraying at the edges after five years of recession.

Yannis Behrakis / Reuters

Demonstrators, dressed as Nazis, wave a swastika flag as they ride in an open-top car in Syntagma Square in Athens to protest against the visit of Germany's Chancellor Angela Merkel, Oct. 9, 2012.

With a year to go until Germany holds a parliamentary election, Merkel also hoped to neutralize opposition criticism at home that she has neglected Greece and contributed to its woes by insisting on crushing budget cuts.

After her government flirted earlier this year with the idea of allowing Greece to exit the eurozone, she now appears determined to keep it in, at least until the German election is out of the way.

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Greece is in talks with its "troika" of lenders - the European Union, European Central Bank and International Monetary Fund - on the next tranche of a 130 billion euro ($170 billion) loan package, its second bailout since 2010.

Without the 31.5 billion euro tranche, Greece says it will run out of money by the end of November.

The European commissioner for economic and monetary affairs, Olli Rehn, said Tuesday that Greece's creditors would not allow the country to go bankrupt, according to the German publication Spiegel. As European Union finance ministers met on Tuesday, Rehn said the next aid package would be granted "at the latest by November."

Merkel said the aid payment was "urgently needed" but stopped short of promising that the funds would flow.

"The troika report will come when it is ready. Being thorough is more important than being quick," Merkel said.

"We are working hard on this, but we must resolve all the problems," she added. "I think we'll see light at the end of the tunnel."

"This is an effort that should be seen through, because otherwise it would make the circumstances even more dramatic later on," she added, according to Spiegel.

Ties between Germany and Greece run deep. Thousands of Greeks came to Germany after World War II as "guest workers" to help rebuild the shattered country and more than 300,000 Greeks currently reside there.

But the relationship is clouded by atrocities Greeks suffered at the hands of the Nazis. Samaras' own great grandmother killed herself after she watched Nazi tanks rolling down the streets of Athens and the swastika flying over the Acropolis.

Greek President Karolos Papoulias, whom Merkel also met on Tuesday, fought against the Germans as a teenager, before fleeing to escape persecution by the Greek military dictatorship and finding refuge in Germany.

The crisis has revived long-dormant animosities, with Greek protesters burning effigies of Merkel in Nazi gear and German media playing up images of lazy Greeks keen for German cash.

Relations hit a post-war low early this year when Merkel's finance minister, Wolfgang Schaeuble, likened Athens to a "bottomless pit" and proposed imposing a European "Sparkommissar" on Greece to control its finances.

"The average German voter is irritated at the thought of dispatching more taxes or savings to feckless southerners, yet is desperate for the respect and goodwill to Germany that comes from public displays of magnanimity," said David Marsh, chairman of think tank OMFIF.

"When Merkel flies to Athens, she's showing she's in charge, and she cares."

Reuters contributed to this report.

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