Troubled Greece facing new wave of strikes over cuts

DEBT-PLAGUED Greece is today facing the start of a new wave of industrial action against painful spending cuts.

Workers walked off the job at midnight last night, in the second major strike called by the country's two largest unions in a week, closing hospitals and schools and stopping all flights and most public transport. Demos are planned in Athens and other major cities.

Under intense pressure from the European Union to quickly show fiscal improvement, the government has announced an additional ¤4.8 billion in savings through public sector salary cuts, hiring and pension freezes and consumer tax hikes.

The cutbacks, added to a previous ¤11.2 billion austerity plan, seek to reduce the country's budget deficit from 12.7 per cent of annual output to 8.7 per cent this year.

The long-term target is to bring overspending below the EU ceiling of 3 per cent of GDP in 2012.

The government says the tough cuts were its only way to dig Greece out of a crisis that has hammered the common European currency and alarmed international markets – grossly inflating the loan-dependent country's borrowing costs.