By Harry Papachristou and Lefteris Papadimas
A "troika" of European Union, European Central Bank and International Monetary Fund inspectors have returned to Greece after quitting the country unexpectedly on September 2, accusing it of not taking strong enough measures to deserve a bailout.
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Without new funds, Greece could run out of cash to pay state wage and pension bills as soon as next month. A Greek default on debt repayments could wreck the balance sheets of banks across Europe and unleash a crisis in the global financial system.
To lure the inspectors back, the government announced more tax hikes, wage cuts and mass-layoffs last week. Labor unions say the Greek public -- in its third year of plunging living standards -- cannot take more pain and the harm to the economy from austerity is making the crisis worse.
Dozens of finance ministry employees gathered in front of the finance ministry on Thursday morning, shouting: "Take your bailout and leave." Civil servants also blocked the entrances to the interior, justice, labor, health and agriculture ministries, a police spokesman said.
"The occupations are carried out today when the troika returns to our country and as we face new barbaric measures," public sector union ADEDY said in a statement.
Plans to step up the pace of strikes and protests over the next few weeks could rattle lawmakers, whose approval is needed to enact the austerity measures.
Authorities fear a repeat of bloody riots which took place in June in Athens's central Syntagma square. Police fired tear gas at protesters outside parliament during a tax vote this week.
The EU, IMF and ECB inspectors are set to comb through new austerity plans for at least a week, but most analysts expect they will approve the new, 8-billion euro tranche of aid.
"I think euro zone finance ministers will in the end release the next tranche of bailout payments for Greece," said Joerg Kraemer, economist at Commmerzbank. "They will not dare turning off the tap on Greece right now, it's a political decision."
Bailing out Greece has become a tough political proposition for other euro zone leaders to sell to their own voters.
A Greek official said Prime Minister George Papandreou, who has already taken his case to Germany this week, might go to Paris on Friday. French President Nicolas Sarkozy's office said the visit was not yet confirmed.
The inspectors' departure earlier this month prompted talk about a sovereign Greek default and focused minds in Athens, Brussels and Washington which are anxious Greece does not fall over the precipice and endanger the world financial system.
After a frantic search for new ways to save money, the Socialist government decided to cut public sector salaries by a fifth, start sacking civil servants, raise taxes on property owners and close tax loopholes.
Before returning, the EU/IMF mission demanded written assurances from Greece that the new pledges will be met, highlighting a lack of trust after repeated failures to meet fiscal targets and foot-dragging about privatizations.
The Greek cabinet met on Thursday to discuss a new wage scale for civil servants and a so-called "labor reserve," into which 30,000 state workers will be put at 60 percent of their salary. If they fail to find another state job within 12 months, they will be dismissed.
The property tax, the first in a string of austerity measures to face the test of lawmakers' approval, was backed by parliament on Tuesday, with all 154 Socialist deputies voting in favor even as police fired teargas at protesters outside.
But labor unions have called new anti-austerity walkouts and protests that may shake the lawmakers' resolve to approve the rest of the measures, expected to come to a vote next month.
Taxi owners who oppose the liberalization of their trade will continue their 48-hour strike on Thursday. Hospital workers protesting cuts will walk off the job for three hours. Trade union ADEDY, which represents the country's 730,000 civil servants, called a rally and said it would march on parliament.
"The latest tax measures are insane," ADEDY said. "Millions of households are driven to desperation."
Papandreou's PASOK party trails the conservatives by 5.8 points, according to the latest opinion poll. The conservatives want a renegotiation of the bailout deal to allow lower taxes and less austerity, something the troika has rejected. ($1 = 0.735 Euros)
(Additional reporting by Daphne Papadopoulou; Writing by Ingrid Melander)