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Greece faces general strike, more cuts planned

ATHENS, Greece — Even as French banks prepared to step in to help, Greece's beleaguered government braced for a 48-hour general strike as lawmakers debate a new round of austerity reforms designed to win the country additional rescue loans needed avoid bankruptcy.

French banks are ready to help troubled Greece by accepting a significant debt rollover, President Nicolas Sarkozy said Monday, a move that could push other banks to pitch in to the Europe-wide effort to keep Athens from defaulting.

Sarkozy said the plan would see banks reinvest their Greek debt holdings into new bonds over 30 years. That would give Greece valuable funding to manage its huge debt load and buy it time to reform its economy.

French banks are among the biggest holders of Greek sovereign debt — some (euro) 15 billion ($21 billion)— with Germany's financial sector also heavily exposed, to the tune of (euro) 16 billion ($22.7 billion), according to the Bank of International Settlements.

Sarkozy urged others to follow the example of the French plan, which was presented Monday at an international meeting in Rome where banks and financial institutions discussed what the private sector can do to save Greece from default.

More than 5,000 police are to guard Athens' city center today, with union protest rallies due to start at this morning and head to Parliament.

The strike is set to disrupt or halt most public services, with doctors, ambulance drivers, journalists and even actors at a state-funded theater joining the protest.

Flights will be grounded both days during scheduled stoppages by air traffic controllers.

Unions are angry at a new $40 billion austerity program that would slap taxes on minimum wage earners and other struggling Greeks, following months of other cuts that have seen unemployment surge to more than 16 percent.

The package and implementation law must be passed in parliamentary votes this week so the European Union and the International Monetary Fund release the next installment of Greece's $156 billion bailout loan. Debate on the new austerity measures got under way in parliament Monday, with Socialist Prime Minister George Papandreou buoyed by word that French banks are willing to defer Greek debt claims and ease pressure on Athens.

Greece faces general strike, more cuts planned 06/27/11 [Last modified: Monday, June 27, 2011 11:27pm]
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