Austerity strikes bring Greece to a halt

As the prospect of a disastrous debt default hung over Greece, the government faced strikes and protests Monday against new austerity measures needed to appease the country’s rescue creditors.

ATHENS — As the prospect of a disastrous debt default hung over Greece, the government faced strikes and protests Monday against new austerity measures needed to appease the country’s rescue creditors.

Athens metro, tram and suburban rail workers held a 24-hour strike, while buses and trolleys were to stop operating for several hours. Airline passengers also faced delays as traffic controllers implemented work-to-rule action, refusing to work overtime. A 48-hour strike by all transport workers is expected later this week.

Greek police held their own protest, with the Special Guards unit hanging a giant black banner from the top of Lycabettus Hill in the capital reading “Pay day, day of mourning.”

Faced with mounting anger from the country’s international creditors, the government recently announced a raft of new austerity measures to secure the next euro8 billion ($10.7 billion) instalment of bailout loans from the euro110 billion rescue package it has been dependent on since last year. Without the funds, Greece only has enough funds to see it through mid-October.

Debt inspectors from the International Monetary Fund, European Commission and European Central Bank, known collectively as the troika, are expected to return to Athens this week to resume a review suspended earlier this month amid talk of delayed implementation of reforms.

But no specific date has been set for their return, and the European Commission made clear Monday that no decision on releasing the funds would be reached during a meeting of eurozone finance minister in Luxembourg next Monday.

“Yes, I can exclude that,” said Commission spokesman Amadeu Altafaj Tardio. He said the troika had to return to Athens first and conclude its mission, and distribute those conclusions to the other eurozone countries before a decision could be made.

He would not say what issues were holding up the troika’s return to Athens.

The review’s delay leaves Greece only weeks away from a potential debt default.

If Greece doesn’t get more rescue loans before mid-October, it will be unable to service its debts or pay salaries and pensions.

Prime Minister George Papandreou heads to Berlin on Tuesday, where he will meet with German Chancellor Angela Merkel ahead of a parliamentary vote there on approving plans to beef up the eurozone rescue fund.

German officials have downplayed prospects of any quick and dramatic change of course in the eurozone debt crisis, such as further increasing the size of euro440 billion ($595 billion) rescue fund, called the European Financial Stability Facility.

European stock markets rose on Monday on hopes that leaders would consider a new approach.

But Merkel also dismissed talk of allowing a controlled default of Greece, insisting instead on the step-by-step implementation of decisions already taken — but which investors are losing faith with.

The government’s new measures include a new property tax to be paid through electricity bills to make it easier for the state to collect, as well as pension cuts and more tax hikes. Lawmakers are to vote on Tuesday night on the property tax bill, which electricity company workers have threatened not to collect.

Greeks have been outraged by the new steps, as they come on top of previous austerity measures which failed to reduce the country’s budget deficit.

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