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Greeks Riot Over Nation's Financial Crisis

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Elena Becatoros and Nicholas Paphitis, Associated Press

BERLIN (AP) -- German Chancellor Angela Merkel avoided giving debt-plagued Greece a commitment of financial assistance Friday, as Athens was rattled by more strikes and violent protests by unions outraged by harsh economic austerity measures.

Merkel met Greek Prime Minister George Papandreou and said the country had not made any request for financial support and she called for an end to market speculation that the indebted country will default.

Papandreou's visit to Berlin was part of a tour by the Greek leader that started in Luxembourg and will take him to Paris on Sunday.

"Germany can express its solidarity," Merkel said, adding that she made it clear that "we are here to help, show understanding."

Her comments echoed previous remarks made this week amid market and media speculation that the European Union may be preparing some sort of bailout aimed at helping Greece cope with its economic woes.

Lawmakers in Greece approved a new austerity package worth euro4.8 billion ($6.5 billion), but faced fierce union opposition to the plan, with strikes Friday grounding flights for four hours and halting public services.

Merkel called the new program an "inordinately important step" even as Greeks protested vehemently against it.

Earlier Friday in Greece, riot police used tear gas and baton charges to disperse rioters who chased the ceremonial guards in 19th-century kilts and tasseled garters away from the Tomb of the Unknown Soldier outside the parliament. A top trade union leader was roughed up by left-wing protesters, while rioters smashed banks and storefronts.

It was the worst violence since Greece's debt crisis escalated late last year. Police said they arrested five people, and seven officers were injured.

Papandreou defended the measures.

"We had to take difficult decisions, but these decisions were necessary if we are to lead our country out of the crisis," he said in Berlin.

About 7,000 people took part in the marches. Protesters also occupied a government printing press in a bid to stop the government formally publishing the new law sanctioning the austerity.

Greece's financial troubles have shaken the European Union and its shared euro currency, whose rules were supposed to prevent governments from running up too much debt.

The center-left government said it is seeking a total euro16 billion ($21.87 billion) in savings this year to reduce a budget deficit of some euro30 billion that is over four times the EU limit as a percentage of annual output.

Despite raising euro5 billion ($6.83 billion) from a successful 10-year bond issue Thursday, Athens remains under intense pressure from high borrowing rates.

Papandreou has warning that Greece could go outside the EU and request financial help from the International Monetary Fund unless it gets a commitment of support.

He seemed satisfied with Merkel's pledge.

"We need political and moral support and we got that today from the German government," Papandreou told reporters.

Earlier Friday in Luxembourg, Prime Minister Jean-Claude Juncker, who heads the informal eurogroup, said after meeting Papandreou: "We have to deal with the problem as a euro area."

He said it was acceptable for the IMF to offer technical assistance. But he insisted: "As the chairman of the euro group I'd like to exclude any further involvement of the IMF."

Papandreou will travel to Paris to meet Sunday with French President Nicolas Sarkozy and head to Washington to meet U.S. President Barack Obama on March 9.

French Finance Minister Christine Lagarde said Friday that Sarkozy would back Greece if its debt woes got it into real trouble.

Speaking to LCI television, she said Sunday's meeting would focus on how the Greek government's new austerity plans will be enacted. She gave no details of the potential emergency support.

Associated Press Writer Nicholas Paphitis reported from Athens.

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