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Greece in ferment despite rescue

business Updated: Jun 26, 2011 22:20 IST
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Greece faces a strike this week and a momentous battle in Parliament as the government struggles to quash dissent to additional austerity reforms needed to secure a vital new European Union-International Monetary Fund bailout.

The country's unions have called a 48-hour walkout from Tuesday on top of power cuts by electricity workers that have hit households around the country for the past week.

The labour unrest, accompanied by large protests outside parliament that have occasionally turned violent, is fuelled by government plans to sell €50 billion ($71 billion) worth of state assets to reduce debt.

Greece has been told by its European peers that it cannot hope to continue receiving aid out of a €110-billion rescue package agreed with the EU and the IMF last year without these reforms and privatisations.

The planned cuts include €6.4 billion just this year in spending cuts on public investment and arms purchases and a reduction in bureaucracy.

The aim of the measures is to cut the public deficit by more than €21 billion to bring it to 1.1% of output by 2015 from 10.5% last year.

The government also intends to sell partial or full stakes in a host of state entities, to reduce the overall Greek debt of more than €350 billion.

Without reforms, the Greek debt is likely to exceed €500 billion by 2015, according to the finance ministry.

(With inputs from AFP & Reuters)