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Greece hit by strikes amid pain and anger over austerity

Greek workers went on strike for 24 hours yesterday in protest at the government¿s austerity drive to secure aid to save the country from bankruptcy.

Students and teachers protest in front of the Greek parliament yesterday as the country was swept by strikes amid new budget cuts. LOUISA GOULIAMAKI / AFP PHOTO
Students and teachers protest in front of the Greek parliament yesterday as the country was swept by strikes amid new budget cuts. LOUISA GOULIAMAKI / AFP PHOTO

ATHENS // A 24-hour strike by Greek workers yesterday forced the transport system to a standstill.

The action was in protest at the government's austerity drive to secure aid to save the country from bankruptcy.

About 1,000 members of the Communist group MAS marched to parliament chanting "resist" and "plutocracy should pay for this crisis".

It was the first big nationwide rally since June, when daily protests ended in bloody clashes with police.

Another 6,000 students, some carrying black flags and wearing gas masks, and teachers joined them outside parliament, with union members expected to assemble them later.

A huge deployment of riot police stood by in case of trouble.

Striking taxi drivers and bus, metro and rail workers meant commuters had to use cars, triggering kilometres-long traffic jams and stranding tourists at hotels in Athens' ancient city centre.

Unions said more strikes were planned.

"The situation is dramatic, all major streets are jammed," said one traffic police official.

An air-traffic controller stoppage delayed 100 flights by up to four hours and dozens more in an out of Greece were cancelled.

After a "troika" of European Union and International Monetary Fund inspectors made clear they were losing patience with the government's failure to meet the targets of a bailout and threatened to withhold aid, the cabinet agreed on Wednesday to front-load austerity measures in a strategy expected to win them more time and money.

Christoph Weil, an economist at Commerzbank, told Reuters: "For the troika at the moment it's enough and the measures will be approved by parliament. The troika will release the next tranche."

Greece must now confront the trickier issue of how to collect extra taxes and implement the painful measures - although commentators said the fiery opposition of the past among some protesters had given way to weary resignation.

Policymakers and economists fear a Greek default on its €340 billion (Dh1,681bn) debt could set global markets tumbling and push other vulnerable euro zone members such as Italy and Spain over the edge.

That, in turn, might plunge the West back into recession.

The chairman of Goldman Sachs's overseas arm said yesterday that the Greek situation was a major threat to the euro.

As well as cutting pensions and extending a real estate tax rise, the cabinet said it would put 30,000 civil servants in "labour reserve" this year, cutting their pay to 60 per cent and giving them 12 months to find new work in the state sector or lose their jobs.

Yannis Panagopoulos, president of the private sector employees' union GSEE, said on state NET TV: "This is a policy we do not tolerate, we do not want. We are in continuous, total, permanent opposition to it."

With the economy expected to contract by at least five per cent this year, after a 4.4 per cent slump in 2010, and unemployment at 16 per cent and rising, most Greeks hold little hope austerity measures will help the nation emerge from the financial crisis.

The conservative opposition, which has a slim lead over prime minister George Papandreou's Socialists in opinion polls and has called for snap elections, maintained its refusal to cooperate with the government, which has irked EU leaders.

The finance minister, Evangelos Venizelos, said yesterday: "The euro zone's leading nations are nervous and are taking it out on us," pursuing a familiar line that Greece is being made into a scapegoat for wider problems.

"We must fully honour our obligations so that no pretexts can be used" against Greece, he added.

The country remains bitterly divided between private sector workers who say a bloated state bureaucracy is strangling Greeks and public servants who say the biggest problems are political corruption and tax evasion.

The new measures followed warnings from the EU and IMF inspectors that Greece must stop missing the targets of its five-year bailout plan or miss the €8bn aid tranche it needs to pay salaries next month.

After more than a year of Greece consistently falling behind on its commitments, the head of an EU task force helping Athens said yesterday he now saw a greater willingness by Greek officials to put the reforms in place.