Greece hit by anti-austerity general strike
A nationwide general strike gripped Greece on Wednesday in the first major test of the socialist government's resolve to push through unprecedented austerity cuts needed to avert a fiscal meltdown.
Protest fever swept the country with public transport paralysed, ferries holding at docks and air traffic grounded as unions went on the warpath against the latest wave of spending cuts and tax hikes.
Hundreds of thousands of civil servants kicked off the protests on Tuesday and a group of about 200 communists also stormed Athens Acropolis, unfurling banners reading "Peoples of Europe, Rise Up."
Wednesday's walkout, the third general strike in as many months, came as the government raced to push the austerity drive through parliament, looking to its comfortable majority there to pass the package on Thursday.
Greece's main unions were to mass in central Athens at 11:00 am (0800 GMT) before moving through the streets of the capital in protest marches.
May Day marches on Saturday led to clashes between anarchists and police who fired tear gas to restore order. Pushed to the brink of default, the government agreed at the weekend to slash spending and jack up taxes in return for 110 billion euros (143 billion dollars) in loans over three years from eurozone countries and the International Monetary Fund.
Among the major measures, the government is to cut 13th and 14th month bonus pay for civil servants and retirees; require three years more for pension contributions; and raise the retirement age for women to 65, the same level as men currently.
"Given the scale of the public opposition to the austerity measures it is still unclear whether Greece will ultimately be willing to take years of fiscal punishment and recession to get its fiscal house in order," economist Ben May at Capital Economics said.
"Accordingly, it is still unwise to rule out the government eventually defaulting or restructuring its debts," he added.
Germany, which will foot the biggest share of the bailout and was highly reluctant to extend taxpayer cash to Greece, has similar concerns.
Berlin warned the Greek government on Tuesday that loans could be halted if Athens did not adhere to the austerity plan. After months of hesitation, eurozone countries and the IMF agreed to lend Greece billions at below market rates after concerns soared last week that the Greek debt crisis could trigger a knock-on effect elsewhere.
IMF chief Dominique Strauss-Kahn, in comments to the French daily Le Parisien published Wednesday, said the EU-IMF package had been put together with the idea of preventing such a scenario.
But he added there was always a risk of "contagion" and that "we must nevertheless remain vigilant."
This fear that the crisis might spread to other weak eurozone economies rattled the Asian markets Wednesday, as it had Europe and the United States the day before.
The euro sank to fresh one-year lows against the dollar during Asian trade, hitting 1.2955 US dollars, down from 1.2981 in New York late Tuesday and falling to 122.77 yen from 125.10.
Hong Kong shares opened 1.97 per cent lower on Wednesday and Australian share prices dived almost two per cent following the heavy losses Tuesday in Europe and the United States.
The Dow Jones Industrial Average closed down more than 200 points on Tuesday, over two per cent, while stock exchanges in Madrid, London, Paris, Frankfurt and Lisbon also took hits.