The city of Athens has been stunned by the Greek riots which have broken out and left 3 dead in the melee. Proposed spending cuts to rein in Greek government spending ahead of a much needed bailout touched off the protests and rioting. However, Greece is likely to have pressure to get things in order before the country can get any quick cash in a bailout.Austerity measures prompt Greek riotsSunday, Prime Minister George Papandreoun proposed a spending bill that would tighten the nation's belt, and it led to agitated protests and the later Greek riots. Financial turmoil and growing deficits led to unrest and to the credit rating of Greece being downgraded. The proposed spending budget would yield savings of 30 billion Euros through 2010. The budget cuts would amount to about 11 percent of Greek GDP, as outlined by MarketWatch.What gets cut?Almost three fourths of public spending in Greece is on pensions and public sector wages. More individuals are employed in the public sector in Greece than by most other European governments. As well as cuts to wages and pensions, an increased value added tax on consumer goods such as alcohol and cigarettes is also incorporated.The BailoutTo keep Greece solvent as a nation, a bailout package of over 110 billion Euro is being put together by the International Monetary Fund and various European Union nations. One of the biggest contributors is Germany, and Angela Merkel, the Chancellor, has put up over 22 billion Euro. She hesitated, and has made it clear reform has to begin before a bailout would make a difference. Despite the unpopularity of the bailout among the German public, the President of the Bundesbank (Germany's Federal Reserve), Axel Weber, assured the bailout would halt further damage.Greek riots preceded by strikesA nationwide strike and protests broke out after the Prime Minister announced the proposals, which is expected to pass due to his party (Socialist) holding a majority, according to the Wall Street Journal. No ferries ran, schools closed, shopkeepers locked their doors, lawyers and doctors all took to the streets in protest. Hospitals were barely able to operate, and no flights went in or out of the country before the Greek riots started. More protests are due to go on.Article resourcesMarketWatchhttp://www.marketwatch.com/story/greeks-go-on-strike-against-austerity-m...Wall Street Journalhttp://online.wsj.com/article/SB1000142405274870396110457522547257751341...
