Cops Fire Tear Gas At Greece Austerity Rally

Police in Athens have fired tear gas after clashing with protesters throwing sticks and bottles as a two-day strike against austerity measures got under way.

Leaders of Greece's ruling socialist party will later urge MPs to help pass the tough proposals demanded by the EU and the International Monetry Fund (IMF).

Some 5,000 police have been deployed around Athens as demonstrators gathered outside parliament, chanting anti-austerity slogans.

Doctors, casino staff, theatre actors and air traffic controllers were just some of the workers who have joined the 48-hour walkout.

The Greek parliament needs to agree to 28 billion euros (£25bn) of spending cuts and economic reforms by the end of this month.

Only then will European finance ministers give the country 12 billion euros (£10.7bn) - the fifth and final installment of the original 110 billion euro (£98bn) bailout agreed in May last year.

Greece needs the loan to pay next month's bills and without it, the country will default by July 15.

Speaking on Monday, Greek prime minister George Papandreou urged MPs to fulfill a "patriotic duty" by voting in favor of the new austerity measures.

But an MP from the country's ruling party has told Sky News he intends to vote against the tough economic programme unless concessions were made.

Furthermore, unions say the measures merely slap taxes on minimum wage earners.

Greece's finances have spiralled out of control partly due to the country's employment laws.

The average retirement age is 61, but millions of workers in the public and private sector retire at 50.

This has left Greece with a hefty and ever-increasing pension liability.

While paying out generous state pensions, the Greek government has failed to generate incomes to match.

Tax evasion is widespread, with only 5,000 Greeks admitting to earning wages of over 100,000 euros (£89,000) a year.

With self-reported earnings that are rarely challenged and a tax inspection system under pressure from spending cuts, up to £13bn in tax may be lost every year.

Meanwhile, governor of the Bank of England Mervyn King has said concerns over Greece defaulting are sufficient enough to have prompted the consideration of contingency plans for the UK banking sector.

He also repeated to the Treasury Select Committee the warning that it was uncertain how exposed UK banks are to Greece due to a complicated web of loans to other European institutions.

There is a danger that regardless of the UK's exposure level, a Greek default would prompt a worldwide tightening of lending from markets to banks that would impact the UK, he added.