Protesters chant anti-austerity slogans during a rally in the northern Greek port city of Thessaloniki, on Wednesday.

Athens - Public sector workers in Greece held street rallies Wednesday at the start of a 48-hour strike to protest government plans to cut 11,000 jobs this year under an austerity programme agreed with international lenders. The strike comes one day after the government secured the next tranche of aid with the European Commission, the European Central Bank and International Monetary Fund, after months of negotiations.

Tax offices, schools and state hospitals in Athens and Pireaus were paralysed by the strike initiated by public sector labour union ADEDY. Many in Greece say the harsh spending cuts have stifled growth and driven unemployment to a record 28 per cent. “I have been left unemployed. How will I be able to feed my family now that there is no work to be found?” asked school crossing guard Manolis Theodiris, one of 2,000 demonstrators in Athens.


Another 2,000 people marched in the northern port of Thessaloniki. In Brussels, EU Economy Commissioner Olli Rehn said eurozone finance ministers would review a detailed report on the aid agreement in two weeks at informal talks in Athens. “The Greek economy is beginning to stabilize and is projected to gradually return to growth in the course of this year.

Fiscal performance is on track to meet the agreed targets,” he said. “Moreover, important structural reforms have been now agreed. This will further improve the growth potential and flexibility of the Greek economy and will help create a fairer and more supportive environment for investment, growth and job creation for Greek citizens.” He warned that it “remains essential to stay the course of reform and especially to adopt swiftly all the agreed policy measures, not least because investors are now showing quite strong interest in Greece.”

Prime Minister Antonis Samaras said Tuesday that 500 million euros (696 million dollars) from the 2013 primary surplus will be distributed to help more than 1 million people in need of financial assistance, especially the homeless. He announced measures to reduce employers' social security contributions to fight record unemployment. Since 2010 Greece has received 240 billion euros in international loans, granted in exchange for strict austerity and reform requirements.


The eurozone's rescue fund still has 10.1 billion euros available for Greece. The current Greek bailout programme is due to end in late 2014, but there has been speculation that Athens will need a third rescue package. A joint statement late Wednesday from the international lenders said that staff teams from the European Commission, ECB and IMF had found Greek authorities “making progress on structural reforms to improve the growth potential and flexibility of the Greek economy and help create a fairer and more supportive environment for investment, growth, and job creation.”

Greece was committed to liberalizing transport and rental markets, opening up closed professions, reducing nuisance taxes and revitalizing planned privatizations, the statement said. Despite delays, progress was being made in public administration reforms “which should reduce the burden of red tape and improve the quality of public services to the Greek people.” “Labor market reforms are behind schedule, but the authorities are committed to implementing them gradually in the remainder of 2014,” the lenders said.

“Competitiveness will be further enhanced by energy market reforms.” Greek authorities “are committed to taking all necessary actions to ensure that banks remain healthy and adequately capitalized and are in a position to support the economic recovery,” the statement said.