Greece on strike as bailout deal in limbo

Athens: Thousands took to the streets of Athens as Greek unions yesterday launched a two-day general strike against planned austerity measures, a day after the country's crucial international bailout was put in limbo by its partners in the 17-nation Eurozone.

Police said some 17,000 people were gathering for two separate protests leading to Syntagma Square, outside Parliament. They chanted slogans against the painful cutbacks, which include reducing the minimum wage by 22 per cent and cutting one in five government jobs in a country which is in its fifth year of recession.

Loan lifeline

Bailout creditors say Greece has not yet met demands for all the austerity measures, however. Frustrated by days of dithering, they have given political leaders in Athens until the middle of this week to meet the full list of required reforms. Otherwise, the country will lose its rescue loan lifeline, go bankrupt next month and likely leave the euro. "We are experiencing tragic moments," Deputy Prime Minister Theodoros Pangalos told Parliament yesterday. "These days are the last acts of a drama that we all hope will lead to a happy conclusion with a voluntary reduction in our public debt and implementation of a framework by 2015 that will allow the economy to stabilise."

The Greek coalition government, led by Prime Minister Lucas Papademos had hoped some of the heat had been taken out of the crisis after leaders agreed on Thursday to a raft of austerity measures they hoped would pave the way for the €130 billion (Dh633 billion) bailout package.

However, finance ministers from the other 16 Eurozone states put up a roadblock later in the day by insisting that Greece had to save an extra €325 million, pass the cuts through a restive parliament and guarantee in writing that they will be implemented even after planned elections in April.

A Cabinet meeting was called for the afternoon, while the majority Socialists and the conservatives were later to hold party meetings to discuss the cutbacks.

The new hurdles Greece has to clear to avoid a default that could send shockwaves around the global economy dented sentiment in the markets yesterday.

Stocks were down all over Europe, with the benchmark index in Athens 1.8 per cent lower in early afternoon trading.

While facing intense pressure abroad, Greece is having to deal with another strike. The country's two biggest labour unions stopped railway, ferry and public transport schedules, and hospitals worked on skeleton staff while most public services were disrupted.

Rightists to vote against austerity measures

The leader of the rightist party in Greece's coalition government yesterday said his party would vote against the latest round of austerity measures required for a massive new bailout deal — despite having backed the measures a day earlier. George Karatzaferis, leader of the LAOS party, said that he would now vote against the government proposal expected to come to parliament late tomorrow. LAOS has 16 deputies in parliament. If the two other major parties, the Socialists and the conservatives, approve the austerity package, it would still pass. Karatzaferis insisted it was not his intention to withdraw from the government, and urged other EU countries to challenge what he described as Germany's domination of the union.