Eurozone finance ministers meeting in Brussels decided on Monday to continue drip-feeding payments of emergency aid to Greece, pressuring Athens to keep its promises to restructure the economy.
At the same time, as many as 5000 Greeks, including hundreds of angry police officers on motorbikes, joined demonstrations against the austerity plans of a government still wobbly after skirting collapse last month. Protesters were particularly incensed by renewed calls by international creditors to cut 15,000 civil service jobs and to put thousands of public workers on reduced wages ahead of possible dismissal, in a country where unemployment already tops 27 per cent.
The mayor of Athens was briefly hospitalised on Sunday night after workers assaulted him as he left a meeting to discuss municipal layoffs, and the mayor of Greece's second-largest city, Thessaloniki, threatened to quit on Monday rather than face deeper cuts.
The protests have flared after a period of relative calm in Greece and revived questions about the ability of Prime Minister Antonis Samaras to carry out the cuts and changes being demanded - and indeed about the future of his government.
International creditors have already granted more than $US257 billion in financial help to the eurozone's crisis-hit countries, but the demands for further budget cuts and structural changes that have accompanied the aid are badly dividing the governments in Greece, Italy and Portugal.
Last week, the government of Prime Minister Pedro Passos Coelho of Portugal, considered something of a model nation by international markets and creditors, nearly came apart as support waned for the austerity program he was charged with carrying out in exchange for Portugal's $100 billion bailout.
At the top of the agenda at the ministers' monthly gathering in Brussels was how much of the next batch of a promised $US10 billion in emergency aid they should release to Greece.
At a news conference in Brussels, the Dutch Finance Minister, Jeroen Dijsselbloem, said euro ministers had decided to make a disbursement of $3.2 billion, with a further disbursement of $650 million in October, on the condition that the country meets restructuring commitments by July 19.
Athens has little choice but to comply. Three years after the government's debt crisis threatened to knock the country out of the eurozone, Greece remains dependent on two aid packages of a little over $300 billion.
But it is proving increasingly difficult for Mr Samaras to balance the demands of Greece's creditors against the anger and exhaustion of the public, and to straddle the widening divisions the austerity program is causing within his fragile governing coalition.
Mr Samaras was forced to reshuffle his government on June 24 after his junior coalition partner, Democratic Left, withdrew to protest an earlier decision by Mr Samaras to shut down the state broadcaster, the Hellenic Broadcasting Corp.
That step, a unilateral decree to eliminate some 2600 jobs, set off a political firestorm in Greece. The episode underscored just how difficult it is for any Greek government to cut the ranks of its bloated civil service.
New York Times