Greece faces general strike, more cuts planned

[June 28, 2011]  ATHENS, Greece (AP) -- Workers across Greece walked off the job Tuesday at the start of a 48-hour general strike as lawmakers debate a new round of austerity reforms, which must be passed if the country is to get crucial bailout funds.

More than 5,000 police were guarding Athens' city center, as about 20,000 protesters marched to Parliament in two separate demonstrations. Another 7,000 marched in Greece's second largest city of Thessaloniki in the north.

Limited clashes broke out between riot police and protesters on the fringes of the demonstration in the early afternoon, with police firing tear gas to keep protesters back.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

ATHENS, Greece (AP) -- Workers across Greece walked off the job Tuesday at the start of a 48-hour general strike as lawmakers debate a new round of austerity reforms, which must be passed if the country is to get crucial bailout funds.

More than 5,000 police were guarding Athens' city center, as about 20,000 protesters marched to Parliament in two separate demonstrations. Another 7,000 marched in Greece's second largest city of Thessaloniki in the north.

Everyone from doctors and ambulance drivers to casino workers and even actors at a state-funded theater were joining the two-day strike or holding work stoppages for several hours.

Hundreds of flights were canceled or rescheduled as air traffic controllers walked off the job for four hours from 8 a.m. Another walkout is expected in the evening. There were further disruptions as public transport workers joined the strike, snarling traffic across the capital, while protesters blockaded the port of Piraeus.

"The situation that the workers are undergoing is tragic and we are near poverty levels," said Spyros Linardopoulos, a protester with the PAME union at the Piraeus blockade. "The government has declared war and to this war we will answer back with war."

Unions are angry at a new euro28 billion ($40 billion) austerity program that would slap taxes on minimum wage earners and other struggling Greeks. The planned measures come on top of other spending cuts and tax hikes, which have contributed to the rise in the unemployment rate to over 16 percent.

Debate on the measures began in Parliament Monday and is to continue later Tuesday. The package and an additional implementation law must be passed in parliamentary votes Wednesday and Thursday so the European Union and the International Monetary Fund release the next installment of Greece's euro110 billion ($156 billion) bailout loan.

Without the euro12 billion installment, Greece faces the prospect next month of becoming the first eurozone country to default on its debts -- a potentially disastrous event that could drag down European banks and affect other financially troubled European countries.

The measures have caused outrage even among lawmakers from the governing Socialists, and Prime Minister George Papandreou has struggled to contain an internal party revolt. Earlier this month, he reshuffled his cabinet in an attempt to get his party's support for this week's vote -- the Socialists only have a 5 seat majority in the 300-member Parliament.

Speaking at the start of the three-day debate Monday night, Papandreou called on lawmakers to fulfill a "patriotic duty" by voting in favor of the new measures. Two of his own deputies have suggested they will not vote for the bill.

European officials have also been pressuring the main conservative opposition party to back the austerity bill.

"Both the future of the country and financial stability in Europe are at stake," European Monetary Affairs Commissioner Olli Rehn said in a statement. "I fully respect the prerogatives and the sovereignty of the Greek Parliament in the ongoing debate. And I trust that the Greek political leaders are fully aware of the responsibility that lies on their shoulders to avoid default."

But conservative party leader Antonis Samaras has refused, arguing that the overall thinking behind the package is flawed despite backing certain measures.

Greece remains frozen out of bond markets and is surviving on the euro110 billion in promised bailout loans. But the initial plan had assumed that Greece would be able to return to the markets next year. As a result, it's become clear that the country will need more help, and Athens is negotiating for a second bailout, which Papandreou has said will be roughly the same size as the first.

Papandreou said he hoped the terms would be better than those for the first bailout.

"I call on Europe, for its part, to give Greece the time and the terms it needs to really pay off its debt, without strangling growth, and without strangling its citizens," he said.

Papandreou's new finance minister, Evangelos Venizelos, said the government acknowledged the new cuts were "unfair" and that he hoped negotiations over a second bailout would be concluded by the end of the summer.

"These measures will take us from running budget deficits to achieving primary surpluses," he said. "It's a difficult but necessary step."

But many Greeks insist they should not be forced to pay for a crisis they believe the politicians are responsible for.

"We don't owe any money, it's the others who stole it," said 69-year-old demonstrator Antonis Vrahas. "We're resisting for a better society for the sake of our children and grandchildren."

[Associated Press]

Derek Gatopoulos, Menelaos Hadjicostis and APTN crews in Athens, and Costas Kantouris in Thessaloniki, contributed.

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