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Debt-laden Greece crippled by strike

10 lutego, 2010

A strike by Greek civil servants Wednesday brought the debt-laden country to a halt amid reports that Germany is ready to lead an EU \"firewall\" to contain the country\'s crisis. 

Government offices, schools and colleges were closed and there were only emergency services in hospitals. Flights across Greece were suspended as air traffic controllers joined the protest and rail services were disrupted.

Around 10,000 people demonstrated in Athens and a further 3,000 in the second city of Thessaloniki as Greek Prime Minister George Papandreou flew to Paris for talks with French leaders.

In separate demonstrations called by civil servants and Communist workers, protesters waved banners proclaiming: \"The plutocracy should pay for the crisis,\" and specifically targeted \"bankers, shipowners and big business.\"

The main union of public workers, which alone counts some 300,000 members, will also stage protests in the second city of Thessaloniki against the \"unjust and meaningless sacrifices\" called by the government.

The state-run railways cut services following a nine-hour walkout announcement unions but international train traffic will not be affected.

Since the Socialist government revealed late last year that the country\'s finances were in much worse shape than had been thought, the markets have punished Greece as they fear unions will beat back any cost-cutting plans.

The Greek prime minister, who is meeting with French President Nicolas Sarkozy later on Wednesday in Paris, has asked civil servants to accept bonus cuts saying they \"must be the first to set an example.\"

The Greek crisis has driven up borrowing costs for governments across Europe, with pressure mounting on a number of other heavily-indebted eurozone members, and sent the euro sliding against the dollar. Related article: Eurozone ministers in Greece talks

The European Commission voiced concern Tuesday that Greece\'s fiscal crisis could affect other parts of the 16-nation eurozone.

There is a \"serious risk of spillover into other parts of the euro area,\" EU Economic Affairs Commissioner Joaquin Almunia told the European Parliament in Strasbourg.

A report in the Financial Times Deutschland Wednesday suggested that Germany was preparing an aid plan for Greece, following weeks of speculation that eurozone nations may need to help Athens to avoid a humiliating turn to the IMF that would shatter confidence in the euro.

The newspaper said German Finance Minister Wolfgang Schaeuble was working on both a bilateral basis and at the European level on putting together a lifeline package.

Another report in the Wall Street Journal said Germany is looking to lead an EU \"firewall\" to contain the Greek debt crisis, possibly by guaranteeing loans to calm fears of a government default.

\"The plan would be undertaken within the EU framework but led by Germany,\" Europe\'s biggest economy, the Wall Street Journal Europe reported, citing a source familiar with the matter.

\"Germany has concluded that guarantees are likely the most efficient way to prevent the spread of the debt crisis,\" a source added.

Greek stocks on Wednesday jumped 4.23 percent in early morning trading after a 4.96-jump in the main index on Tuesday. The difference, or spread, between the yield of Greek and German bonds fell to 259 basis points.

Athens on Tuesday pressed on with efforts to slash expenditure and raise revenue to narrow its 12.7 percent deficit -- more than four times the eurozone limit of three percent of gross domestic product that a host of European countries are also flouting.

Greece\'s main private sector union GSEE will stage a nationwide strike on February 24 in opposition to the pension reform. The civil servants on Wednesday said they would join that strike too.