New general strike brings Greece to a halt

A new general strike hit Greece today, grounding flights and disrupting hospital and transport services as unions protested against freshly approved labour reforms amid painful austerity and rising unemployment.

Security is tight in central Athens, where two separate demonstrations are planned. Previous protests have been marred by violence, and in May three people died in a bank torched by rioting demonstrators.

The new general strike is the seventh organised this year by unions appalled at a wave of austerity measures meant to pull Greece out of its worst financial crisis since the Second World War.

All air, rail and ferry services have been cancelled, while traffic in Athens is being severely disrupted as public transport workers and taxi drivers walk off the job for hours. Journalists are also holding a 24-hour strike, causing TV, radio and internet news blackouts, and newspapers will not be published on Thursday.

Crippled by high budget deficits and a mountain of debt, Greece was saved from bankruptcy in May by a 110 billion euro international rescue loan package. In return, the Socialists slashed pensions and salaries, hiked taxes, raised retirement ages and eased restrictions on private sector layoffs.

Late yesterday, the government won a key vote in parliament on a fresh labour reform package that includes fresh pay cuts, salary caps and involuntary staff transfers at state companies. The new law also reduces unions' collective bargaining powers in the private sector, where employers will be able to substantially reduce salaries.

All opposition parties opposed the reforms, which left-wing parties claim will take labour relations "back to the Middle Ages".

But prime minister George Papandreou's Socialists cite the need to turn around loss-making public corporations while saving private sector jobs by allowing struggling businesses to cut costs.

Unions argue that the cutbacks are unfair and counter-effective.

"These policies shift the burden of the crisis onto the backs of low salary earners and pensioners, deepen the recession and increase unemployment," the GSEE umbrella private sector union said.

Public transport workers, among those directly affected by the reforms, held a 24-hour strike yesterday, leading to large traffic jams in Athens as commuters car pooled and used taxis to get to work.

Further transport strikes are planned for Thursday and Friday.