One-day strike disrupts Athens

A nationwide strike by public-sector workers in Greece has caused serious disruption to travellers and bank customers.

The General Confederation of Greek Workers (GSEE), the country's biggest labor grouping with about 1m members, called the strike as a protest against a draft tax bill which it says infringes workers' rights.

The bill would reduce unions' role in the running of state-owned firms.

Unionists claimed the strike was an overwhelming success and said they would consider another next week.

"If the government wants a break with the unions, then it shall have it," GSEE president Christos Polyzogopoulos was quoted as saying.

During the 24-hour walkout all public transport was closed, most Olympic Airways flights were grounded and post offices, state television and state banks shut down.

Commuter traffic in Athens was thrown into chaos with journeys taking more than twice the usual time.

Rioting over harsh austerity measures left three people dead in a torched Athens bank and clouds of tear gas drifting past parliament, in an outburst of anger that underlined the long and difficult struggle Greece faces to stick with painful cutbacks that come with an international bailout.

The deaths were the first during a protest in Greece in nearly 20 years.

Fear that the bailout won't stop the debt crisis from spreading to other financially troubled EU countries like Portugal and Spain intensified amid the violence Wednesday, as credit ratings agency Moody's put Portugal on watch for a possible downgrade.

In Brussels, EU officials desperately tried to calm market fears that Greece's debt crisis was spreading, insisting it was a "unique case" combining profligacy and tampered accounts. EU President Herman Van Rompuy insisted the growing debt problems in Spain and Portugal had "absolutely nothing to do with the situation in Greece."

"Greece is a unique and particular case in the EU" because of its "precarious debt dynamics" and because it "has cheated with its statistics for years and years," EU Commissioner Olli Rehn said.

German Chancellor Angela Merkel urged lawmakers on Wednesday to speedily approve their country's share of the loans to Greece. As Europe's largest economy, Germany will provide euro8.4 billion ($10.8 billion) in 2010 and up to euro14 billion ($18.1 billion) more over 2011 and 2012, according to the plan.

"Nothing less than the future of Europe, and with that the future of Germany in Europe, is at stake," Merkel told lawmakers. "We are at a fork in the road."

Merkel's government had insisted that Greece agree to new austerity measures before Germany committed to financial assistance — a stance that drew criticism of foot-dragging. Merkel had appeared to want to delay action until after a local vote in Germany this Sunday, but ratings agency Standard and Poor downgraded Greek bonds to junk status last week, deepening the crisis.

The shocks from Greece have shaken world markets and raised questions about whether the rally in stocks since they hit bottom in March 2009 can continue.

David Joy, chief market strategist for Columbia Management, a U.S. manager of $341 billion in stocks, bonds, cash and other investments, warned against complacency over the U.S. economic recovery and said this week's events in Greece and Europe "should serve as a reminder that the ramifications of the financial crisis are still being felt."

"Most of these lingering problems relate to the fact that excessive amounts of debt have been accumulated prior to the financial crisis. It's going to take time for these to be worked through," he said.

The outcome is a flight to safety, in which the dollar rises and money leaves riskier and economically more sensitive assets such as stocks and commodities.

Even with the bailout, some economists think Greece could eventually default on or restructure its debts because economic growth is expected to be poor over the next several years, hurting government revenue. Some also fear the austerity measures insisted upon by the EU and IMF could make prospects for growth even worse in the name of paying down debt.

The new austerity measures are to be voted on in Parliament Thursday. The Socialists hold a comfortable majority and the bill is expected to pass.

Source: news.yahoo.com/news.bbc.co.uk

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