ECONOMY

ECB besieged by protests as Draghi opens $1.4 billion tower

As the European Central Bank prepares to inaugurate its new headquarters four months after moving in, more than 10,000 protesters are seeking to spoil the party.

Frankfurt, the euro area’s financial capital and home of the common currency, is bracing for demonstrations and sit-ins on Wednesday at locations throughout the city by anti-austerity groups and organizations sympathizing with the plight of Greece. At the ECB’s 1.3 billion-euro ($1.4 billion) premises in the east end, police have erected barbed wire and barricades to keep the protesters at least 10 meters (33 feet) away.

Rioters set several cars, including a police vehicle, and garbage containers alight, set off smoke bombs and threw stones, glass and corrosive substances, leaving a trail of destruction and blocking roads in the city center, Frankfurt police said in Twitter postings. Protesters said police deployed tear gas.

“We were moving toward the ECB and then tear gas cartridges were fired from the police lines,” said Martin Dolzer, a member of the Left party from Hamburg. The smoke “spread over a broad area; it was a very strong irritant.”

Police are equipped with pepper spray and it’s possible they used the substance in defense, said Claudia Rogalski, a police spokeswoman.

‘Violent Outbreaks’

The first incidents occurred “shortly after 6 a.m.,” she said. “There have been violent outbreaks at several locations in which police have been attacked.”

Nine days after the ECB started buying sovereign debt in a 1.1 trillion-euro plan to revive inflation and rescue the economy, protesters are laying the blame for recession and unemployment in the 19-nation euro area at the doors of ECB President Mario Draghi and German Chancellor Angela Merkel.

A new government in Greece, led by the leftist Syriza party, is preparing emergency measures to boost liquidity as the cash-starved country braces for more than 2 billion euros in debt payments on Friday. The country is unable to access bailout funding as it haggles with euro-area governments over the terms of its aid program. Its lenders have been cut off from regular ECB finance lines and pushed onto emergency credit from the Greek central bank.

“In the past, we protested against things like the rescue of the banks in Europe,” Werner Renz, a representative of protest group Attac, said on Tuesday. “The focus of our protests this year is on Greece. We need more of Athens in Europe and less of Berlin. There is no way Greece can repay all its debt. The situation can’t be solved by austerity alone.”

Inauguration Ceremony

Draghi is scheduled to host an inauguration ceremony at 11 a.m. with guests including Frankfurt Mayor Peter Feldmann and Tarek Al-Wazir, economy minister of the German state of Hesse. The ECB Governing Council is also scheduled to hold a non- monetary policy meeting where Greece will be on the agenda. The central bank plans to be fully operational, a spokesman said.

Police showed up en masse for Draghi’s first outing of the week on Monday evening, when he attended an event organized by the Sueddeutsche Zeitung newspaper. Police cars and vans crowded the street in front of the Steigenberger Frankfurter Hof hotel in downtown Frankfurt, with police officers in anti-riot gear. There were no obvious protests.

Dozens of groups, including Syriza followers, are joining in the rally organized under the Blockupy banner. The demonstrators planned to blockade the area around the ECB in “transnational actions of civil disobedience,” Blockupy said on its website. The ECB has issued guidance to staff on how to dress so as to avoid drawing attention.

Real Economy

“Expansive monetary policy serves the financial markets and the wealthy first and foremost,” Sahra Wagenknecht, a lawmaker for the Left party in the Bundestag in Berlin who will address the crowds, said in an e-mail. “The money doesn’t reach the real economy as investment.”

A rally outside the city hall at the Roemerberg, Frankfurt’s medieval center, is scheduled to run from 2 p.m. to 5 p.m., ending with a march through the city to the Alte Oper near Deutsche Bank AG’s headquarters into the evening. Some public transport services will be disrupted or diverted, and traffic will be rerouted.

“We are monitoring the situation and are informing our employees,” Klaus Thoma, a Deutsche Bank spokesman, said by phone from Frankfurt on Tuesday.

Protesters in November scaled fencing at the ECB’s headquarters and hurled paint bombs at the glass facade while trying to gain entrance to the building after a small group of about 2,000 demonstrators taking part in an organized rally broke away. The organizers called an end to that march after the incident.

[Bloomberg]