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Latest update : 2011-05-11

A general strike called by Greece's main unions in protest at government austerity measures went into effect on Wednesday, disrupting transport and state services even as international creditors debated whether to give the country a new aid package.

AFP - Greece came to a standstill on Wednesday as a general strike took effect against new austerity measures by a government seeking to get a new package of help and avoid a damaging debt overhaul.

The strike, the second this year called by the country's main unions, paralysed maritime and intercity train traffic, shut down state services and temporarily halted flights through the country, respective operators said.

A four-hour stoppage by air traffic controllers from 0900 to 1300 GMT also caused the two main Greek operators, Olympic and Aegean, to scrap or reschedule some four dozen flights at the start of the busy tourist season.

"We strongly protest against the unfair and harsh policies that have pushed up unemployment, widen false employment and trample on worker rights," the leading Greek union GSEE said.

Separate street protests by unions are scheduled later in the day against a new wave of cutbacks expected from the Socialist government which is struggling to limit slippage on tough austerity targets during a deep recession.

The mobilisation is held while experts from the European Union, International Monetary Fund and European Central Bank (ECB) are conducting in Athens a scheduled audit of finances and reforms in Greece to determine if it merits a critical new slice of funding from a bailout package agreed last year.

Greece last year pledged to put its economy in order after taking a 110-billion-euro ($158-billion) loan from the EU and the IMF to avert insolvency.

But despite a huge effort in 2010, it eventually overshot its deficit reduction goals because the economy shrank faster than expected.

The government has now rolled out a new programme to economise some 26 billion euros over three years to help bring down the country's enormous debt.

It also plans to sell a first batch of state assets worth 15 billion euros including stakes in several public corporations.

Athens' overall debt has exploded to 340 billion euros, leading to mounting speculation -- even from Greek officials -- that it will need alternative options to keep up with repayments when the EU-IMF loan runs out in 2013.

"The most possible scenario is that additional measures are going to be taken," said Michael Vassiliadis, a researcher at the Greek foundation for economic and industrial research (IOBE).

"We have already heard of additional measures of about 3 billion euros both on the revenue and the expenditure side of the fiscal balance," he told AFP.

Senior EU and Greek officials have denied that any debt restructuring is on the agenda, although eurozone officials have begun to admit that Greece is likely to need more aid in some form.

At the weekend the head of the Eurogroup of eurozone finance ministers Jean-Claude Juncker said that "we think that Greece does need a further adjustment programme".

And an EU source told AFP on Monday that eurozone ministers were considering extra help for next year which would be in exchange of new budget constraints from Greece.

With Greece unlikely to be able to raise money on financial markets next year as initially planned, there has been increasing speculation it will need another 60 billion euros.

European Union Economic Affairs Commissioner Olli Rehn, who is the top EU official behind bailout negotiations, said a decision on further aid is a few weeks away pending the result of the joint audit.

The EU bloc's economic frontrunner Germany has also called for decisions to be taken after the EU-IMF mission delivers its report.

"We'll have to wait until June and the handing over of the report," German Finance Minister Wolfgang Schaeuble told journalists in Berlin.


Date created : 2011-05-11


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