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Strike disrupts Greece but public backs reforms

Source: Reuters - Thu 11th Feb 2010

Thousands of Greek civil servants staged a 24-hour strike shutting schools and grounding flights on Wednesday, but a lack of popular support for protests offered hope Athens can tackle a debt crisis shaking the euro zone.

Some 5,000 members of the ADEDY public sector union gathered before parliament chanting "Traitors" and waving banners reading "We won't pay for the crisis." Riot police briefly fired teargas at demonstrators who tried to cross a nearby security cordon.

The 500,000-strong union wants Prime Minister George Papandreou to scrap emergency measures including a wage and pension freeze, and has threatened to escalate its protests.

"These measures are unjust and we will continue our struggle as long as the government does not change its policies" ADEDY General Secretary Ilias Iliopoulos said, adding that his union would likely join a private sector walkout on February 24.

Iliopoulos said 70 percent of members joined the stoppage, but many public employees appeared at ministries and schools. The government did not provide participation figures.

Markets gave Greece some respite on Wednesday amid reports of European talks on a historic bailout.

Greek Finance Minister George Papaconstantinou said euro zone ministers discussed Greece on a call and group chairman Jean-Claude Juncker would present a common view at a special EU summit on Thursday. French daily Le Monde said France and Germany would propose a plan to head off a Greek bankruptcy.

"We have not asked for help, we have said that we just want you to support our own will, our country's credibility in implementing this (fiscal) programme" Papandreou said after talks with French President Nicolas Sarkozy in Paris. 

Opinion polls suggest most of Greece's 11 million population back the government. On the streets of Athens, people said it was too soon to dismiss efforts by Papandreou, who took office last year, to clean up state finances after years of graft.

"I'm afraid low earners will be hurt but we must be patient and if the measures don't work, then people have the right to react massively" said Maria Pipikari, 29, a shipping employee.

FUNDING COVERED TIL APRIL

The spread of Greek bonds over benchmark German Bunds meanwhile staged its biggest one-day fall since the creation of the euro as investors breathed a sigh of relief at EU talks over possible forms of budgetary aid for Greece.

Athens needs to borrow 53 billion euros this year. It has covered its needs until April, but then has a heavy schedule of payments of up to 20 billion euros by end-June. Analysts warn that if it runs out of money to pay state wages and pensions, it will face a ferocious popular backlash.

Wednesday's strike left thousands of tourists stranded as it shut airports to all but emergency flights and closed the port of Piraeus which serves much of the Aegean. Historic attractions like Athens' Acropolis were also closed to visitors.

It is seen as just the first in a series of planned protests whose severity will depend on Papandreou's success in restoring faith in the economy, which he says will grow this year.

"The prime minister didn't keep his promises and he is dipping his hands in the pockets of the poor" said Eleni Papapostolou, 46, a teacher and mother of two. "I have to cut out coffee just to get by. Ordinary people have debts too."

The public sector strike comes a day after the government unveiled details of measures to cut its deficit below the EU ceiling of 3 percent of GDP by 2012, from 12.7 percent last year - the highest in the 16 nation euro zone.

Unions oppose the proposals to freeze public wages, slash the salary supplements many Greeks get on top of basic pay, and replace only one in five people leaving the civil service.

The government, however, appeared to have faced down a protest by farmers blocking highways and a border crossing with Bulgaria, as the demonstration dwindled to the last few people. In another positive sign for the government, data showed its deficit plunged in January.

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