In the second national strike this week, Greeks walked off the job today and violence erupted in the streets of Athens as they again express their outrage to state austerity measures demanded by the "troika" - the European Central Bank (ECB), the IMF, and the EU - in a pending bailout agreement.

Protesters clash with riot police during demonstrations in Athens against the new austerity measures. (Photograph: Orestis Panagiotou/EPA) The austerity plan includes lowering the minimum wage by 22 percent, axing 150,000 public sector jobs and reducing pensions.

Al-Jazeera reports:

The strike began late on Thursday after frustrated bailout creditors in the 17-nation eurozone gave Greece until the middle of next week to fully meet demands for new, harsh cutbacks. Otherwise, the debt-crippled country will lose a rescue loan it needs to avoid defaulting on its debts next month and probable expulsion from the euro single currency.

Clashes erupted outside parliament in Athens on Friday, as dozens of hooded youths threw fire bombs and stones at police, who responded with tear gas. Police said about 7,000 people took part in the demonstration, while another 10,000 supporters of the country's Communist party held a separate, peaceful march.

And Reuters adds:

Some protesters compared Greece's plight, facing bankruptcy unless it accedes to the demands of international lenders, to its seven years under military dictatorship.

On Syntagma Square in central Athens, songs from the struggle in the 1960s and 1970 against a junta of colonels boomed out over loudspeakers.

Police said three policemen and two protesters were slightly injured in clashes. Five people were detained.

With Greece probably at its lowest ebb since the junta was overthrown in 1974 and democracy restored, protesters denounced the "troika" [...]

"Do not bow your heads! Resist!" They chanted. "No to layoffs! No to salary cuts! No to pension cuts!

Even the police, who have repeatedly clashed with protesters since the crisis broke out more than two years ago, announced resistance to the creditors' demands.

"As we can see you are continuing this destructive policy, so we warn you that you cannot make us fight against our brothers," the Greek Police Federation said in an open letter to the troika.

"We warn you that as legal representatives of the Greek police, we will issue arrest warrants for a series of legal violations ... such as blackmail, covert abolition or erosion of democracy and national sovereignty."

And under the headline, 'Greek Police Union Seeks Arrest Warrants for EU, ECB Officials,' Bloomberg reports:

The Greek police officers’ union called for arrest warrants to be issued for European Union, European Central Bank and International Monetary Fund officials negotiating austerity measures for a national debt bailout.

The Greek Federation of Police Officers said in a published letter it will ask for arrest warrants for former European Commission representative Servaas Deroose, the IMF’s Poul Thomsen and the ECB’s Klaus Masuch. Under Greek law, arrest warrants must be issued by an appellate court prosecutor, a police spokesman in Athens said today, speaking on condition of anonymity in line with official regulations.

“We warn you that we will demand, as legal representatives of the Greek police according to Greek law, that warrants for your arrest are immediately issued,” according to the letter published on the union’s website.

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Will Greece Drop the Euro?

Most observers agree that Greece will meet the demands of the 'troika' and despite resignations from several ministers ahead of the vote, the Greek parliament has the necessary votes to pass the measures this Sunday. Still, talk continues of an ultimate Greek withdrawal from the Eurozone.

A report from Reuters, looked at the trend:

Among European diplomats and economists, it has become more commonplace in recent weeks to talk about the possibility of Greece leaving the euro zone. On Twitter, the tags #Grexit and #Grout are frequently applied in discussions on the topic.

In a research paper published on Feb. 6, Willem Buiter, the chief economist at Citi, raised his estimate of the likelihood of Greece dropping out of the currency zone to 50 percent over the next 18 months, from 25-30 percent previously.

And in an analysis prepared for CNN, Desmond Lachman writes:

One would have thought by now that the IMF and Europeans would have grasped how politically unsustainable is their Greek policy prescription, particularly considering that the Greek economy is now in a virtual state of collapse.

January's European Summit also provides the strongest of evidence that European policymakers seem to have learned little from their unfortunate Greek experience. For rather than recognize that the internal and external imbalances of countries such as Greece, Portugal, Ireland and Spain have reached such large proportions that make it almost inevitable these countries will be forced both to default and to exit the euro, European policymakers are striving to preserve the euro very much unchanged in its present form.

They are doing so by proposing that all countries should adopt constitutional balanced budget amendments and sign up to legally binding budget-deficit reduction programs that are to be externally monitored. It is supposed that after several years, once the desired degree of deficit reduction is eventually attained, the present monetary union could move toward a full fiscal union that would provide the firmest of underpinnings to the existing currency union.

The fly in the ointment is that to reduce the large public-sector imbalances in the European periphery would require the early restoration of economic growth in those countries.

However, the severe public-sector belt-tightening across all euro-member countries (within the constraints of euro membership that precludes currency devaluation as a way to boost exports) is a sure recipe for a deep and prolonged European recession. And as Greece's experience over the past 18 months would attest, a deepening economic recession puts deficit-reduction targets well out of reach, increases a country's public-debt service burden and heightens political opposition to staying the austerity course.

In other words, the austerity measures put countries like Greece in a recessionary death spiral that they have no way of escaping.

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