Greece Heads For 48-Hour Standstill

Posted June 28th, 2011 at 5:40 am (UTC-5)
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Workers across Greece walked off their jobs Tuesday at the start of a 48-hour general strike as lawmakers debate a new round of austerity reforms.

An official with the Greek air traffic controllers' union said the airports would close four hours in the morning and again in the evening, both Tuesday and Wednesday. Hundreds of flights were canceled or re-scheduled due to the work stoppage.

The strike is set to disrupt or stop most public services. Doctors, ambulance drivers, journalists and even actors at a state-funded theater are set to join the protest.

Meanwhile, French President Nicolas Sarkozy says French banks have agreed to help Greece overcome its debt crisis by stretching out most of their existing loans to the Greek government, which is trying to pass an austerity plan to avert bankruptcy.

Mr. Sarkozy said Monday his government has persuaded the banks to give Greece more time to repay 70 percent of private French loans that mature in the next three years.

Athens would have to repay the remaining 30 percent of private French loans immediately on maturity. French banks are among the biggest holders of Greek sovereign debt.

Mr. Sarkozy encouraged other European Union nations whose banks have lent heavily to Greece to use the French plan as a model for preventing a Greek debt default. France presented the plan at a Monday meeting of EU officials and international bankers in Rome, but Italian officials said no decisions were taken.

Greece faces a debt default as early as next month unless it secures $17 billion from a bailout package offered by the International Monetary Fund and EU last year. To qualify for the payment, Greek parliament must pass a series of unpopular austerity measures by Thursday. Lawmakers began to debate the package Monday.

The measures, proposed by Greek Prime Minister George Papandreou's Socialist government, include five years of drastic spending cuts, tax increases and sell-offs of state-run companies. Mr. Papandreou hopes to push the measures through parliament using his party's slim five-seat majority in the 300-member assembly.