EU-IMF resume Greek audit as protests grow

EU and IMF officials resumed an audit of Greece's strained finances on Thursday, seeking to avert a dangerous default, as civil servants opposed to government austerity measures occupied ministries. The crunch talks on freeing up the next tranche of debt aid worth 8.0 billion euros, which Athens needs to keep paying its bills, should be made easier by German parliamentary approval for a beefed up eurozone rescue fund. Germany is the 11th of 17 eurozone states to agree to boost the 440 billion euros ($590 billion) European Financial Stability Facility and to give it new powers, for example to buy bonds of debt-stricken members such as Greece. Athens would be among the first beneficiaries since the move was agreed at a July 21 eurozone summit which put also together a second Greek debt bailout after a May 2010 deal proved unable to stabilise its strained finances. The debt-hit nation, sinking deeper into recession, must persuade the audit mission that its reform plans are credible to merit new funds from the 2010 110-billion-euro loan agreed with the EU and the International Monetary Fund. Papandreou on Tuesday presented his crisis plan to German Chancellor Angela Merkel in Berlin, with Athens once again racing to beat default deadlines. He now wants to see French President Nicolas Sarkozy, a source close to the issue told AFP. Greek reserves for wages and pensions run out next month, and the 8.0-billion-euro tranche from the first EU-IMF package has been delayed due to reform slippage in Athens. EU, IMF and European Central Bank officials returned to Athens Thursday, having abruptly left the country earlier this month after discussions hit an impasse. "The mission is coming today and will meet the finance minister in the evening," a ministry source told AFP. To placate its creditors, the Greek government has announced additional measures over the month, including pension cuts, civil service layoffs and a controversial property tax that will cost salary-hit Greeks hundreds of euros. Unions have reacted with a new wave of strikes. The Greek capital was paralysed by transport strikes for three days this week while civil servants will stage a mass walkout on October 5, with a general strike to follow on October 19. On Thursday, civil servants occupied a host of ministries in protest at the cuts. "Staff associations are staging occupations at most ministries and services," the Adedy union said, adding that nearly a dozen buildings had been taken over. "The occupations are held ... in view of the new barbarous measures decided to further slash wages, introduce poverty pay rules, impose new taxes and carry out mass layoffs," the union said. Nearly all major ministries were occupied by protesting staff, including the finance, development, justice, labour, health, interior affairs and agriculture, Adedy said. A police source said the ministries were held by 50-member staff groups. The occupations began before official opening hours and were to continue until Friday, state television NET said. The EU-IMF-ECB mission's report will determine if the debt-hit nation can again escape default. Though the ruling party's narrow parliamentary majority has been enough to get every reform passed so far, there is visible friction in the cabinet about the ongoing austerity drive after nearly two years of sacrifices. A senior government official on Thursday admitted he was unable to pay the new property tax and would have to sell assets to cope while one report said a cabinet meeting dropped from its agenda a divisive project to put some 30,000 civil servants on immediate labour reserve.