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News Wrap: Thousands of Greeks Protests New Austerity Measures

June 15, 2011 at 12:00 AM EST
In other news Wednesday, Greece's government was engulfed by political rebellion in Parliament and new rioting broke out in the streets as more than 25,000 demonstrators marched against new austerity measures. Also, U.S.-Pakistani tensions grew after word that Pakistan had arrested five people who helped locate Osama bin Laden.
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HARI SREENIVASAN: The government of Greece was engulfed today by political rebellion in Parliament and violent protests in the streets. Rioting broke out as more than 25,000 demonstrators marched against a new round of austerity measures.

We have a report narrated by Jonathan Rugman of Independent Television News.

JONATHAN RUGMAN: In downtown Athens, an explosion of anger. Their country is on the brink of bankruptcy, and no amount of tear gas will persuade these demonstrators that they should foot the bill.

These protesters tried and failed to storm parliament. Their taxes are going up. Wages, pensions and benefits are being cut. And unemployment stands at 16 percent. There were street battles with riot police and running skirmishes with masked youths amid the third and biggest general strike in Greece this year.

Tonight, Greece’s economic meltdown turned into a political crisis as well. The prime minister, George Papandreou, met the Greek president, and let it be known he would resign, if only the opposition parties would accept the latest austerity measures imposed by the rest of the Eurozone and the IMF.

Greece’s debt mountain now stands at 340 billion euros. Why, they ask, should we dance to the Eurozone’s tune in repaying it, when higher taxes and lower wages only make a bad economic situation worse?

MAN (through translator): The people are paying for these terrible measures. The European Union is manipulating Greece in any way it wants.

JONATHAN RUGMAN: Eurozone finance ministers are no less sick of bailing the Greeks out. In Brussels last night, they debated a second bailout on top of last year’s 110 billion euros, a bailout of the bailout.

And stock markets around the world tumbled today upon fears that Greece will walk away from its foreign debts, rather than risk domestic chaos.

HARI SREENIVASAN: Worries about Greece weighed on Wall Street as well. Stocks were also unsettled by news that consumer prices, minus food and fuel, rose in May by the most in nearly three years. The combined effect sent the Dow Jones industrial average falling nearly 179 points to close at 11,897. The Nasdaq fell 47 points to close at 2,631.

For more on all this, we turn to Susie Gharib of the “Nightly Business Report” on PBS.

Thanks for being with us.

SUSIE GHARIB: Great to see you, Hari.

HARI SREENIVASAN: All right.

So, Susie, kind of help explain why the uncertainty in Greece is having such a profound effect on the stock market in the U.S.

SUSIE GHARIB: Yes, I know. I can see that you’re thinking, that’s thousands of miles away, and what does it have to do with us?

But here at the New York Stock Exchange, the one word that kept coming up was contagion. And the worry is, is that the problems in Greece will spread to other economies in Europe and to the banks that hold that Greek government debt, and if they don’t pay those payments, that that could lead to a global economic slowdown, and that would affect American companies that do business overseas.

And American companies do a lot of business in Europe. So, you have to remember that we are a global marketplace, and that what happens in other countries are connected with us. And that’s why we saw the market fell off today.

HARI SREENIVASAN: So, there’s concern that this could happen in Ireland and Portugal and Spain and slow their economies down as well?

SUSIE GHARIB: Exactly.

And, you know, this week, the S&P warned that there’s a good chance that Greece could default on its debt. Your report just said that European officials couldn’t agree on a second bailout package to give more money to Greece. If that doesn’t come through, that means Greece is going to make borrowing costs go higher for other countries. That will lead to a slowdown in — all across the continent and, as I just mentioned, a domino effect on what that will have on world economies everywhere.

HARI SREENIVASAN: All right, let’s talk a little bit about the domestic numbers. The Dow has been trending down for almost a three-month low now.

SUSIE GHARIB: Right.

HARI SREENIVASAN: We have got manufacturing numbers that don’t look that good. We have got a consumer price that is inching up. What do all these numbers add up to?

SUSIE GHARIB: Right.

Well, you know, there — all of this data has been coinciding with that sell-off, that, every day, we get some number that is saying that the economy is slowing down. You mentioned a moment ago those consumer prices highest in three years, also today, a manufacturing report showing a slowdown in new orders.

And manufacturing has been a bright spot in the economy. You add it all up, there are a lot of worries about, is there going to be another recession? We see that American companies are not hiring. The unemployment rate is at nine percent. Gasoline prices are at $4, and that impacts consumer spending.

And so that’s what the concerns are. Now, keep in mind, the market pros that we’re talking to are saying that this is not the beginning of a new bear market; it’s more like a correction.

HARI SREENIVASAN: All right.

SUSIE GHARIB: But, no matter what you call it, there’s a lot of uncertainty, and the markets don’t like uncertainty.

HARI SREENIVASAN: All right, Susie Gharib from the “Nightly Business Report,” thanks so much for your time.

SUSIE GHARIB: Nice talking to you.

HARI SREENIVASAN: New tensions roiled U.S. relations with Pakistan today, after word that the Pakistanis have arrested people who helped locate Osama bin Laden.

U.S. Navy SEALs killed the al-Qaida leader on May 2 in Abbottabad, Pakistan. Today, The New York Times reported five informants who aided the CIA have been taken into custody in recent weeks. One was said to be a Pakistani army major who copied the license plate numbers from cars that visited bin Laden’s compound.

In Washington today, State Department spokesman Mark Toner cautioned against overreacting to the news.

MARK TONER, State Department spokesman: More terrorists have been identified and killed on Pakistani soil than anywhere else in the world. And that’s in part due this counterterrorism cooperation that we have. So it’s in our interest to work through these challenges as they arise and to move forward.

HARI SREENIVASAN: The Pakistani military denied today that any army major had been arrested.

Separately, Pakistani intelligence officials reported a series of new missile attacks by U.S. drone aircraft. They said 15 suspected militants were killed near the Afghan border.

In Syria, the government called for refugees to come home after thousands fled to Turkey in the face of a violent crackdown. But the appeal came as Syrian army units made ready to sweep into another border town to put down protests.

In Geneva, the top U.N. human rights official called for a full investigation.

NAVI PILLAY, United Nations high commissioner for human rights: The mounting casualty rate among civilians is alarming. It underscores the civilian government’s lack of restraint in its efforts to crush dissent. I remind the Syrian authorities that violations of international law are serious crimes, for which perpetrators can be held accountable.

HARI SREENIVASAN: Meanwhile, in Damascus today, large crowds of supporters of President Bashar al-Assad turned out in the streets. They unfurled a massive Syrian flag and carried pictures of the president. Assad’s family has ruled Syria for 40 years.

Americans are living longer in general, but not in some parts of the country. The journal “Population Health Metrics” reported today that babies born in 2009 will live an average of 78 years and two months. But in hundreds of counties, many of them in the South, life expectancy for men actually fell.

For example, a man in Fairfax County, Virginia, is expected to live 15 years longer than a man in Holmes County, Mississippi. Life expectancy for women was also down. The researchers cited obesity, smoking and other health problems as the main factors.

Arizona Congresswoman Gabrielle Giffords has been released from a Houston rehabilitation hospital five months after she was shot in the head. A hospital statement today said Giffords was discharged and can begin outpatient treatment. For now, she will move to the home of her husband, astronaut Mark Kelly, just outside Houston. A gunman wounded Giffords and 12 others and killed six at a political event in Tucson, Ariz., last January.

Those are some of the day’s major stories.