Greece battles 50 fires authorities suspect were lit to protest bailout

Dani Vergou and Eric Lyman | Special for USA TODAY

ATHENS — Much of Greece was ablaze Friday, as authorities suspected arson in more than 50 fires that might be linked to protests over austerity measures forced on Greeks by European creditors as the price for a new $96 billion bailout.

The government declared a state of emergency in parts of the country and evacuated people living near the blazes, which have caused power outages. One of the largest fires was on the outskirts of Athens. It covered the sky over the capital in grey smoke and sent firefighting helicopters and airplanes rushing to the scene.

The number and intensity of the blazes forced the cash-strapped Greek government to ask for help from nearby countries, including — notably — Germany, the country many in Greece blame for insisting on the hard-line terms of the bailout plan. Germany is a major creditor of Greece.

Greek Prime Minister Alexis Tsipras, who was forced to accept those harsh terms, reshuffled his cabinet Friday after 38 of 149 members of his ruling Syriza party — including two cabinet ministers and two deputies — refused to vote for the bailout package Wednesday. His left-wing party was elected in January on a pledge to resist new austerity demands, but Tsipras changed course this week after it became clear that the only alternative was national bankruptcy and ouster from the 19-nation zone that uses the euro.

The German parliament on Friday approved the bailout, Greece's third in five years. It requires Greece to raise taxes, slash spending on pensions and other government programs and sell off state-owned assets.

The plan also provides a $7.7 billion temporary loan from the European Central Bank. It includes around $1 billion to Greek banks, which are on the verge of running out of money.

Deputy Finance Minister Dimitris Mardas announced Thursday that banks, which have been closed for nearly three weeks, would reopen on Monday.

Problems will remain even after the banks open, as it is not clear how long the infusion of cash will last. “The new money will allow the banks to run normally for at least a week,” said Kostas Melas, a former banking executive who is now an international finance professor at Padeio University in Athens. “After that, it’s unclear.”

Melas said the risk banks face is not that Greeks will pull their money out to send it abroad but that they will keep it at home in cash. While the banks have been closed, ATM withdrawals have been limited to about $66 a day. Movement of funds abroad also has been restricted.

Many Greeks who saw the crisis coming and withdrew their assets from banks before limits were imposed have survived better than those who left their funds untouched.

“I could see what was going to happen and so I started to withdraw money from my accounts in March,” said Stelios Stylianou, 34, a military engineer. “It’s about 10 months’ salary, all told, and I keep it in different places and use it when I need it.”

In many high-profile cases, wealthy Greeks moved millions of dollars off shore before the worst of the crisis, dealing a crippling blow to an already struggling financial system. Reports on their withdrawals have been a staple of news coverage.

“One of the groups I’m most angry with is the elite who were allied with the former governments,” said Eleni Papadopoulou, 57, a public health worker. “Greece’s creditors have declared war on us, and the rich just move their money abroad and act as if they own the country.”

Stelios Adoniou, 36, who works as a laborer during the day and a chef at night, said, “The rich get away with everything in this country.”

Analysts say convincing Greek individuals and companies to put money back in the banking system will be a major obstacle.

Living with capped ATM withdrawals, reduced government services, and stores that are closed or running out of merchandise have taken a toll on people here. Making the situation worse is what many Greeks see as humiliating negotiations for the bailout package, which sparked violent protests in Athens and has given rise to anti-German and anti-European Union sentiment. The prevailing view is that unfeeling European creditors refused to make any concessions knowing that Greece was on the brink of economic collapse.

“I could fill 500 pages with my feelings from the day of the vote,” said Konstantina Katramadou, a 63-year-old housewife, who added that she and her husband survive on his meager $460 a month pension. “The measures are unbearable. I don’t know how I’ll survive another reduction in my husband’s pension. But a reduction will come.”

Michalis Babis, 45, who works for a company making wine and cheese, added: “I’ve spent so many hours following the news these last three weeks that it’s been a nightmare.”

“I feel dispirited, numb, and confused,” said Adoniou, the laborer and chef. He said part of him opposes the austerity measures because they would mean more hardship but part of him favors them because otherwise, "we would be finished as a country."

"Either way," he said, "we are bankrupt.”

Lyman reported from Rome.