Greeks Protest Austerity as EU, IMF Officials Visit

Reuters

Thousands of angry Greek workers marched to parliament on Tuesday to protest against austerity, waving banners reading "EU, IMF out!" as Athens' lenders arrived for talks in a race against the clock to avert a messy bankruptcy.

Greece's private sector creditors warned on Monday that the government must urgently break a deadlock in negotiations on a plan to slash the country's debt if is to avoid a disorderly default when a major bond redemption comes due in late March.

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A team of EU, IMF and ECB officials started combing through Athens' books on Tuesday as part of efforts to put together a 130-billion-euro rescue package the country needs, together with the debt swap deal, to stay afloat.

But ordinary Greeks, who have been hit hard by tax hikes and spending cuts which were part of a first bailout agreed in 2010, fear more austerity and wage cuts with the second bailout and say they cannot take more belt-tightening.

"We want them to get lost. They are pushing the country towards collapse with these measures. They are selling off Greece," said Yannis Tsalimoglou, a 51-year old dockworker, whose income has taken a 30-percent hit with the crisis.

Greece has entered its fifth consecutive year of austerity-fuelled recession, with unemployment reaching a record high of 17.7 percent in the third quarter of 2011.

"We must resist," said 52-year-old mother of two Evgenia Panagiou, a private sector employee who has not been paid since October. "Why are they doing this to us? It's not our fault. They (politicians) devoured the money and they are still getting the same big salaries."

COOL HEAD?

The EU/IMF inspection visit is closely linked with Greece's efforts to agree with banks on a deal to slash its debt of over 350 billion euros by 100 billion euros.

Without the so-called "PSI" deal, which would see creditors voluntarily giving up at least 50 percent of their promised returns, the EU and IMF have warned they will consider that Athens' debt is not back on a sustainable track and will not release further aid.

Greece had said talks with Charles Dallara, the head of bank lobby IIF which negotiates in the name of private bondholders, would most likely resume on Wednesday after breaking down last week over the interest rate on new bonds Greece will offer and a plan to enforce investor losses.

But a government official said on Tuesday he may be back to Greece only on Thursday if more time was needed. Athens has in the meantime sent senior officials to Washington to consult with private lenders and try to convince reluctant IMF board members to keep helping Greece.

While officials involved in the negotiations say all parties are increasingly nervous about the risk of a disorderly default, European Central Bank Governing Council member Ewald Nowotny said involving private sector investors was a challenge that can be mastered.

"It is a problem that, with a cool head, can be resolved," Nowotny said on Tuesday.

The strike brought the Athens metro to a standstill on Tuesday and no ferries left from its main ports. Journalists walked off the job and buses only ran for part of the day.

Strikes and protests last year did not make the government budge from the austerity path required by its lenders in return for aid, and technocrat Prime Minister Lucas Papademos has vowed to do what it takes to avoid a disorderly default.

But analysts say "a silent anger" is growing among ordinary Greeks. If sacrifices do not bear fruit and if the new government fails to meet targets, protests may attract a higher turnout and get violent again.