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Greek govt cuts prompt national strikes

George Papandreou - Public salary freeze ordered
George Papandreou - Public salary freeze ordered

Greek tax collectors and customs officers are taking part in strikes against government cuts designed to stem a financial crisis.

Both groups embarked on a two-day walkout ahead of industrial action called by civil servants, doctors and communist-backed workers on 10 February and a general strike called by Greece's main umbrella union on 24 February.

The unions are protesting against a government austerity programme that they say has progressively become harsher under pressure from the European Union and market speculation that has battered Greek finances.

Greece's largest union GSEE - which has around 600,000 members - is expected to approve union chief Yiannis Panagopoulos' call for a general strike on 24 February.

The country's recession-hit economy has already been disrupted by a protest by farmers, who have blocked key motorways and shut down border crossings on a near-daily basis for three straight weeks.

Greek Prime Minister George Papandreou ordered a public salary freeze, a higher retirement age and a hike in petrol prices, supplementing a crisis plan unveiled last month to reassure the international financial community.

Greece's debt stands at more than €294bn. Its deficit is well beyond EU limits of 3% of output for eurozone members and it suffered a triple downgrade of its sovereign debt in December.

European stock markets fell sharply this evening due to continuing worries about big budget deficits in some euro zone countries, particularly Greece.

The euro also tumbled in value, falling below $1.38 for the first time in seven months.

The European Central Bank earlier today welcomed a Greek plan to tackle its debt crisis but warned that all euro zone countries must bring their public finances into order.

In Dublin, the ISEQ index fell 1.8% to close at 2,970, with AIB and Bank of Ireland falling almost 7%. The London, Paris and Frankfurt markets all ended more than 2% lower.