Protesters in Greece took to the streets again Tuesday, expressing anger over Europe’s demands for more spending cuts and tax increases. James Mates of Independent Television News reports on the unpopular new round of austerity measures then Margaret Warner sets up her interview with Italian Prime Minister Mario Monti.
Read the Full Transcript
Next, a two-part look at Europe's debt crisis.
First, more protests in Greece against austerity measures in the country where the troubles began two years ago.
We have a report from James Mates of Independent Television News in Athens.
It is 20 years to the day since the Maastricht Treaty was signed to bring the continent every closer under the euro.
This afternoon, this was a German flag being burned in Athens. Before long, riot police were swinging batons and firing tear gas. Greeks believe they are being driven into poverty on orders from abroad. This is a country is seething with anger.
Inside the parliament, politicians seem to be on the verge of accepting Europe's demands for another round of cuts to wages, pensions and health care. It's designed to reduce Greece's massive debt. But as anyone in this crowd will tell you, they have been cutting for two years now, and the debts have simply got bigger.
EVA KAILI, socialist member of Parliament: I don't think they can take anymore. And I think it's the wrong recipe. That's why. They could take it if they knew that it was a way out. But from what it seems, it's not a way out. It leads us to deeper recession.
What the Greek government is having to do today is choose between two appalling options: to take the medicine that Europe has prescribed and with it years more of austerity and recession, no guarantee of success at the end of it; or to forget Europe's money, to go it alone, leave the euro, knowing that in the short term, at least, that would be even more painful. One or the other, they have to choose.
A storm swept through Athens this afternoon, driving many of the protesters home. It was also enough to rip the European flag from its pole, where it flies beneath the Acropolis. Many Greeks, though, are simply too angry to notice the symbolism.
Now Italy, another European country and a much larger economy under financial pressure.
On the eve of his visit to Washington and meetings with President Obama, Italy's premier talked today in Rome with our Margaret Warner.
Amid protests in the streets and pressure from abroad, a new face came on to the Italian political scene three months ago.
Prime Minister Mario Monti's mission: try to rescue the country's stagnant economy and unwind its massive national debt.
MARIO MONTI, Italian prime minister (through translator): If we will be able to take advantage of this opportunity altogether to start a constructive dialogue on general goals and decisions, we will be able to redeem the country and to rebuild the confidence in its institutions. Thank you.
Italy had not fallen to the same depths as Greece, Portugal and Ireland, needing bailouts by the European Union, but the economy was stalled. The markets were hammering Italian debt. And Prime Minister Silvio Berlusconi was facing sex and corruption charges. He resigned after he lost his working majority in parliament over austerity measures the E.U. had demanded.
With that, the Italian president turned to Monti. The former professor served as an E.U. commissioner for nearly 10 years, but has never held elected office. Now he leads a government composed mostly of other technocrats. They must try to ensure that Italy can continue to borrow on international credit markets and keep paying off a national debt that equals 120 percent of its gross domestic product.
Among E.U. countries, only Greece has a larger debt load. Monti has pushed through budget and social welfare cuts. But he also has warned his European partners, especially Germany, that austerity must be accompanied by growth.
At the same time, his moves to modernize the Italian economy have run up against longtime traditions, such as the protective hold that guilds have over everything from taxicabs to lawyers. So far, his proposals have been endorsed by parliament, but more tests loom.