Greece strikes continue. Police fire stun grenades as blackouts occur

Police scuffled with demonstrators in Athens late Tuesday as the government faced fresh opposition to its austerity measures, despite signs that markets are beginning to respond positively to Greece's drastic cuts.

Riot police fired stun grenades to disperse rock-throwing youths outside parliament during a brief flare-up of violence after 2,000 people took part in a protest march.

Greece's state power company began rolling blackouts — affecting parts of the northern city of Thessaloniki and other places, as well — after workers at the utility went on a 48-hour strike to protest pay cuts.

State hospital nurses staged a one-day strike and 400 union members demonstrated peacefully outside the health ministry in Athens.

Greece is under pressure from the European Union to control its finances, after its mounting debts hit confidence in the euro and jolted world markets.

Athens has pledged to slash its budget deficit from an estimated 12.7 percent of gross domestic product in 2009 to 8.7 percent this year, and bring it under the EU limit of 3 percent in 2012.

The government announced a €4.8 billion austerity package this month, including cuts in civil servants' pay, pension freezes and consumer tax increases. A sales tax hike from 19 to 21 percent this week has increased the cost of fuel and other consumer goods and services. The draft tax bill has been submitted to Parliament for discussion.

Ratings agency Standard & Poor's took Greece off credit watch Tuesday, winning the country some respite from market pressure. It said the austerity package was "appropriate" for budget-reduction targets.

Greece says it isn't seeking a bailout from the European Union but may need help borrowing at a cheaper rate if yields on its bonds remain high. EU leaders have refused to give any details on an assistance plan beyond a vague promise to provide a safety net against financial collapse.

But Labor Minister Andreas Loverdos said he was encouraged by the support expressed by European Union officials.

"The Europeans are not telling us to take further measures ... they are praising the measures we've taken and looking for ways to support us," Loverdos told private Mega television.

"Greece is not a beggar, asking for people to give what they can — we are not at that level, we must understand this," Loverdos said.

On Thursday, taxi drivers and gas station owners will strike to protest a draft law aimed at an overhaul of the tax system. The proposal has also angered prominent members of Greece's powerful Orthodox Church, which would have to pay a new 20 percent tax on earnings from its property.

"This is a position against the church that can be regarded as hostile," said Metropolitan Bishop Anthimos of Thessaloniki, Greece's second largest city.