Finance ministers from 17 countries launch European Stability Mechanism used to bail out struggling banks and economies.
German Chancellor Angela Merkel has told Greece that the “tough path” of painful spending cuts will pay off, amid demonstrations by thousands of protesters in Athens in a show of anger against her visit.
Police fired tear gas on Tuesday to disperse protesters attempting to storm a barricade just blocks away from where Merkel was meeting with Antonio Samaras, Greek prime minister, while small groups of masked youths threw bottles at riot police.
While Merkel praised the progress of reforms undertaken by Greece, 25,000 protesters brandishing banners reading “You are not welcome, Imperialisten Raus” [Imperialists out]” or “No to the Fourth Reich” vented their anger against the budgetary discipline preached by her.
Two Nazi flags were draped on a steel barricade near parliament and set on fire.
On her first visit to Greece in five years, Merkel said: “I am deeply convinced that this tough path is worth it and Germany wants to be a good partner.
“A lot has been achieved. There is still a lot to do and Germany and Greece will work very closely together.”
Samaras, a conservative who took office after elections in June, responded: “Greece is determined to keep its promises and overcome the crisis … the Greek people are bleeding right now, but they are determined to win the battle of competitiveness.”
Criticised at home
Merkel has been criticised at home for avoiding a visit to Athens to address the debt crisis, unlike Herman Van Rompuy, EU president; Jose Manuel Barroso, European Commission president; and Jean-Claude Juncker, the eurozone chief.
Al Jazeera’s Barnaby Phillips, reporting from Athens, said: “Angela Merkel has decided that this government is her last chance to have co-operation from Greece after all the economic and political turmoil there has been in this country over the past two years.
“The alternatives if it were to collapse are very frightening from her point of view. So it’s symbolic, she’s showing that she supports it.
“But she is always walking that tight line between the anger on the Greek streets, and the concerns of her own electorate back in Germany, that Greece, quite frankly, is a bottomless pit into which the German voter feels he or she has already put far too much money,” he added.
When Samaras visited Berlin in August, Merkel had insisted that she wanted Greece to stay in the eurozone and pledged German help after crisis talks with Samaras.
Steffen Seibert, Merkel’s spokesperson, announced on Monday that she would convey a message of support for “ambitious” cuts already in place in Athens and encouragement to stay the course.
“She is going to Greece to express her support for the ambitious reform efforts that the Greeks have set out and are, in part, beginning to implement,” Seibert said.
“We should not forget, and I think this is sometimes forgotten in Germany, that Greece can point to some successes when it comes to reducing the deficit through very difficult measures.”