General strike hits Greece as EU raises pressure on debt

A general strike gripped Greece yesterday in protest against new austerity measures demanded with increasing urgency by the European Union as part of a debt rescue deal with banks.

Thousands of protesters braving a light rain assembled on Syntagma Square in central Athens, a landmark of Greek anger against austerity measures from the EU and International Monetary Fund.

Greece is at the limit of a timetable to agree new budget action, and to conclude a debt-write-off deal with banks, under a second rescue package which it needs to avoid debt default in about six weeks’ time.

“No to public sector layoffs!”, “No to cutting the minimum wage!”, protest banners said as part of a 24-hour strike against severe budget action that had begun under the slogan “That’s enough, we can’t take any more.”

There was only a skeleton service operating in schools, ministries, hospitals and banks while commuters using buses and metros faced major delays in Athens. Air travel was expected to be unaffected however.

Yiannis Panagopoulos, leader of the GSEE union, has described the measures as a “death sentence” for the country, aimed at slashing salaries by 20-30 per cent on top of previously imposed cuts.

Greek press covered the possibility of new austerity measures in depth. “Sacrifices with salary and pension cuts”, the daily Ethnos said. Daily Kathimerini wrote the country was being choked by “Merkel and Sarkozy”.

Later, Prime Minister Lucas Papademos, caught between conflicting pressures for the soul and solvency of the nation, was to hold key meetings. He was set for talks with heads of the Greek Socialist, Conservative and far-right parties that form his unwieldy coalition and reach agreement on strict budget action demanded by Greece’s creditors.

Meanwhile in The Hague, the EU Commissioner for New Technologies Neelie Kroes, in the latest expression of pressure from the EU, told the Dutch newspaper De Volkskrant that it was “not a train crash if someone leaves the eurozone”.

Ms Kroes, while stressing she was not in favour of Greece going back to the drachma currency, said there was “no guarantee that Greece is heading in the right direction”.

But an EU diplomatic source suggested all was not lost and that negotiators hoped talks would be wrapped up by today.

The EU source said that eurozone finance ministers have been asked to be on standby for talks, probably via teleconference, late today or tomorrow.

Greece must pay €14.5 billion in bonds due March 20 to avoid default.

Athens and its private creditors are under intense pressure from the “troika” to cut the country’s total debt burden down to what is seen as a sustainable level of 120 per cent of GDP in 2020 from 160 per cent at present.

Athens, which has been shut out from raising long-term debt on the markets, raised €812.5 million in six-month debt paying 4.86 per cent interest, a slightly lower rate than in a similar auction a month before.

Greek Finance Minister Evangelos Venizelos on Monday blamed the political parties for the failure to reach consensus.

“Instead of looking at this tragic dilemma with national unity there are many who spend their effort on a conventional, outdated, party confrontation as if nothing has happened,” the minister said.