Greek PM vows to fight corruption after 11-day protest

ATHENS Tue Dec 16, 2008 2:25pm EST

1 of 5. A policeman chases protesters during a rally in northern Greek town of Thessaloniki December 16, 2008.

Credit: Reuters/Grigoris Siamidis

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ATHENS (Reuters) - Greek Prime Minister Costas Karamanlis pledged on Tuesday to tackle corruption after 11 days of violence triggered by the police killing of a teenager and fueled by public anger at scandals and a slowing economy.

About 100 youths attacked a police station in Athens, setting fire to a bus and four cars belonging to officers. Students briefly occupied state TV, interrupting the news, and violence flared in the northern city of Thessaloniki.

Also, for a second day farmers protesting at low prices cut off the main highway to northern Greece for several hours.

Karamanlis said helping Greeks -- a fifth of whom live in poverty -- was a priority but his options were restricted by the country's onerous debt, made worse by the riots that quickly spread across Greece and to some other European countries.

Greece's worst violence in decades was sparked by the December 6 shooting of a 15-year-old but fed off anger at high youth unemployment and unpopular economic measures as the global crisis buffets its 240-billion-euro ($327.9 billion) economy.

"Long unresolved problems disappoint young people: the lack of meritocracy, corruption in everyday life, a sense of social injustice," Karamanlis told his parliamentary team. "The fight against them is hard and constant and we are committed to it."

Karamanlis, under fire for his hands-off reaction to the riots, said he underestimated the public backlash and the scale of a monastery land scandal besetting his government for months.

A parliamentary enquiry failed on Monday to seek any prosecutions for the deal, where a Mount Athos monastery got valuable state property in exchange for cheap rural land, costing the state millions of euros.

With more protests planned as the budget goes to parliament this week, Karamanlis said income-tax cuts will go ahead. But he warned against high expectations, saying Greece will spend 12 billion euros, about 5 percent of GDP, just to service its debt.

"Our top priority is to support those hurt the most ... (but) this debt is a huge burden that reduces the government's flexibility at a critical time," he said.

RESHUFFLE POSSIBLE

The opposition socialists, however, said Karamanlis and his party did not understand the severity of the economic situation.

"It is obvious they don't understand they've lost the trust of the people and, in these cases, the solution is always given by the people," said PASOK spokesman George Papaconstantinou.

Political analysts said the riots raised the prospect of snap elections and Karamanlis was likely to sacrifice some ministers to inject new blood into his conservative government.

"Today the prime minister accepted partial political responsibility," said Theodoros Livanios, director of research at pollster Opinion. "Karamanlis will soon announce a reshuffle of his government and will wait to see the success of this."

The spread between Greek debt and German benchmark bonds -- a measure of perceived risk -- reached its widest point in nearly a decade, at more than 2 percent. Analysts said the riots had compounded concerns over to the global economic downturn.

Shops and cars were smashed and looted in Athens and other cities for days. The National Confederation of Commerce estimates 565 shops were damaged in Athens alone, costing 200 million euros and ruining the Christmas shopping period.

About 20 student protesters occupied state television on Tuesday, interrupting the broadcast of the afternoon news for around 20 seconds and holding a banner reading: "Against State Violence." A state TV executive apologized to viewers and said the students threatened employees unless they were put on air.

Scores of schools and university buildings remain occupied by students in protest at the killing. The policeman who shot Alexandros Grigoropoulos was charged with murder and jailed pending trial, while his partner was charged as an accomplice.

Karamanlis' New Democracy party swept to power in 2004, vowing to clean up politics, but was soon hit by scandals. Weekend polls showed strong disapproval of the its handling of the riots, strengthening PASOK's ratings lead.

(Additional reporting by George Georgiopoulos and Tatiana Fragou, Writing by Daniel Flynn, Editing by Michael Roddy)

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