, ATHENS, Feb 7 – A general strike gripped Greece on Tuesday 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 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 percent 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”.
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 Wednesday.
The EU source said that eurozone finance ministers have been asked to be on standby for talks, probably via teleconference, late on Wednesday or Thursday.
Greece must pay 14.5 billion euros 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 percent of GDP in 2020 from 160 percent at present.
Athens, which has been shut out from raising long-term debt on the markets, raised 812.5 million euros in six-month debt paying 4.86-percent 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.
Papademos, being pulled one way by his EU partners and the other by domestic sentiment, met officials from the EU, European Central Bank (ECB) and IMF again on Monday evening.
Those talks were aimed at wrapping up weeks of negotiations and saving his country from a historic default in March that could roil the 17-nation eurozone and undercut a global economic recovery.
A new eurozone package worth 130 billion euros ($170 billion) in aid to Greece, pending since October, hangs in the balance.
In Paris on Monday, German Chancellor Angela Merkel and French President Nicolas Sarkozy ramped up the pressure on Athens.
Merkel warned that Greece would receive no more EU aid to cope with the debt crisis until Athens reaches a deal with the EU, ECB and IMF ‘troika’ on more spending cuts and reforms.
A spokesman for EU commissioner Olli Rehn warned that Greece had already in effect missed the deadline to get the deal done.
Grouped within the Institute of International Finance (IIF), negotiators representing banks, insurance companies and private institutional investors held talks on Sunday on cutting some 100 billion euros from the roughly 200 billion in Greek government debt they hold.