The way forward? Equestrian statue of Theodoros Kolokotronis in Stadiou Street

Charred bricks and broken glass form the bulk of what was once the Attikon cinema, burned down by hundreds of rioting Greeks in protest at the harshest austerity measures Europe has ever seen. Five lethargic firemen hose water onto the smouldering ruins. Behind them a ring of about 20 camera crews film the scene, and behind them, a ring of bystanders hold up their phones and take pictures. Even for crisis-hit Greece, the violence has been severe.

The Attikon, previously a fine example of Athens’s dwindling neoclassical architecture, is on Stadiou (stadium) Street, one of several that lead into Syntagma (Constitution) Square, where the parliament sits. On Sunday night, thousands of people poured through Stadiou and into Syntagama, fighting police and looting shops while inside parliament MPs argued over the latest austerity package required by the eurozone and the IMF in return for a €130 billion bailout, which Greece needs to make the next repayment on its huge sovereign debt, and so avoid bankruptcy and the potential collapse of the eurozone.

The bill passed but the governing coalition – of the two main parties, the centre-left Pasok and centre-right New Democracy, and some smaller ones – was forced to expel more than 40 deputies for voting against it. The cuts include a promise to lose 15,000 public-sector jobs, laws to make it easier to fire employees, and a lowering of the minimum wage by 20 per cent to €600 (or in some cases €450) a month. Outside, the crowds demanded to know how anyone was supposed to live on that.

Katerina, a 30-year-old businesswoman, joined the thousands of peaceful protesters in Syntagma Square at around five on Sunday afternoon. The mood darkened at around 10 p.m., two hours before MPs began to vote, and the police decided to disperse the crowd. Dividing Syntagma into sections, they fired volley after volley of tear-gas into the corner where Katerina was, forcing the choking crowd to take the one channel of escape that was eventually opened to them – away from the parliament. A couple of Katerina’s friends fled into a nearby hotel and watched dozens more tear-gas canisters pound the glass doors behind them. The were around 80,000 peaceful demonstrators, and a black bloc of a few hundred. ‘Everyone is saying that 300 thugs burned down the city,’ Katerina told me, ‘but inside parliament three hundred arseholes are burning down the country.’

The government says it has no choice; it may be right. On television on Saturday, the technocratic prime minister, Lucas Papademos, a former vice president of the European Bank, warned of even worse economic and social chaos if the measures weren’t passed. The country, he warned, was a breath away from ‘Ground Zero’. Even the bailout is not yet certain – despite the vote. Greece has a €325 million ‘gap’ in its budget that the EU is demanding be filled before it pays up. And the people are out of options: even the ballot box offers little hope, after eurozone leaders demanded assurances that the package will be implemented regardless of who wins the general election in April.

Across Greece, unemployment and poverty have soared, and so have the conspiracy theories. Yannis Haralambous, a 28-year old courier, told me that the Americans are behind the cuts, which are designed to punish Greece as Washington seeks to destroy its great rival, Europe. More serious is the widespread belief that the violent anarchist groups are riddled with undercover police to stir up more violence and help provoke the inevitable crackdown. A photo bouncing around the internet shows a policeman wrestling a violent ‘rioter’ to the ground. Both men’s boots are circled – they are identical, regulation police issue.

The morning after has a familiar smell in the city these days. Acrid traces of tear-gas hang in the air and Athenians walking to work have developed a familiar gait: shoulders hunched, a tissue or scarf pressed over their mouth in an echo of the bandanas worn by the violent protesters. Outside the parliament, I spoke to Costas Harzides, who has been unemployed for a year. ‘Every few months we go through this,’ he said. ‘It doesn't change a thing. Nobody knows what our future is.’

Eighty yards up from the Attikon, outside Athens’s Museum of National History, is an equestrian statue of Theodoros Kolokotronis, who smashed the Ottoman army led by Mahmud Dramali Pasha in 1822, during the Greek War of Independence. The statue’s right arm extends outwards, pointing east, away from Europe.