Greek protests as France, Spain face squeeze

Thu Nov 17, 2011 6:58pm EST
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By James Mackenzie and Alexandria Sage

ROME/PARIS (Reuters) - Italy's new government has announced far-reaching reforms in response to a European debt crisis that on Thursday pushed borrowing costs for France and Spain sharply higher, and brought tens of thousands of Greeks onto the streets of Athens.

Italy's new technocrat prime minister, Mario Monti, unveiled sweeping reforms to dig the country out of crisis and said Italians were confronting a "serious emergency."

Monti, who enjoys 75 percent support according to opinion polls, comfortably won a vote of confidence in his new government in the Senate on Thursday, by 281 votes to 25.

He faces another confidence vote in the Chamber of Deputies, the lower house, on Friday, which he also expected to win comfortably.

"Only if we can avoid being seen as the weak link of Europe can we contribute to European reforms," said Monti, who was sworn in on Wednesday as head of a government of experts after a rushed transition from the discredited Silvio Berlusconi.

In Athens, at least 50,000 Greeks joined a protest rally presenting the first public test for a new national unity government, also headed by an unelected figure, that must impose spending cuts and tax rises if Greece is to escape bankruptcy.

Police fired tear gas at black-clad youths as protest marchers beat drums, waved red flags and shouted: "EU, IMF out!"

The Spanish government was forced to pay the highest borrowing costs since 1997 at a sale of 10-year bonds, with yields a steep 1.5 points above the average paid at similar tenders this year.   Continued...