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LEAD: Services across Greece paralysed due to 48-hour strike



18 Jan 12
Laborstart

Athens - Greek trade unions scaled up their industrial action and protests on Tuesday, as the country's international lenders returned to Athens to decide whether current reforms were enough to secure a crucial bailout.

Some 7,000 protesters took to the streets in the capital in a peaceful demonstration over a wave of austerity measures which include layoffs and pay cuts.

Transport and other services across the country were paralysed on the first day of a 48-hour general strike.

Hospitals were being run by essential staff, while workers in the media and legal sectors also joined the strike. No television and radio news was broadcast and the publication of newspapers and magazines suspended until Friday.

Meanwhile, inspectors from the European Union, International Monetary Fund (IMF) and European Central Bank (ECB) started talks in Athens on Tuesday to examine Greece's finances. The more senior missions' chiefs expected in the Greek capital on Friday.

The European Commission's task force chief for Greece, Horst Reichenbach is also scheduled for a four-day visit.

The government in Athens is bracing itself for an extremely difficult week of negotiations on its second EU/IMF bailout, as it tries to revive talks with private investors.

The EU/IMF teams are expected to press for Greece to boost competitiveness by reducing the minimum wage and abolishing supplementary salaries paid on Christmas and Easter holidays.

Unions and employers will hold talks on Wednesday in an effort to come up with a plan to cut labour costs.

Reichenbach is expected to discuss the possibility of accelerating implementation of austerity measures and increasing the absorption of EU subsidies.

A crucial component of the 130-billion-euro (165-billion-dollar) EU/IMF bailout for Greece, the second since May, is a bond swap deal with private creditors in order to avoid a default that is aimed at reducing national debt by 100 billion euros.

The talks on the bond swap deal, which has seen disagreement over the interest rate are to resume this week.