ATHENS, Greece (AP) — Greece was facing its second general strike in a month Thursday as workers protested over another batch of austerity measures that are designed to prevent the bankruptcy of the country.
The strike was taking place as European leaders headed to Brussels for a summit in which Greece's economic fate will likely feature large.
The strike grounded flights, shut down public services, closed schools, hospitals and shops and hampered public transport in the capital. Taxi drivers were joining in for nine hours, while a three-hour work stoppage by air traffic controllers led to flight cancellations.
Thousands of protesters gathered for rallies ahead of two separate demonstrations in central Athens, watched over by a heavy police presence. Many such protests have turned violent in the past, with masked youths fighting police with petrol bombs and rocks.
Demonstrators' ire was focused on the new belt-tightening for 2013-14, which has been demanded by international creditors in exchange for the release of the next batch of the country's bailout.
The city has seen hundreds of anti-austerity protests over the past three years, since Greece revealed it had been misreporting its public finance figures. With confidence ravaged and austerity demanded, the country has sunk into a deep economic recession that has many of the same hallmarks of the Great Depression of the 1930s.
"We are sinking in a swamp of recession and it's getting worse," said Dimitris Asimakopoulos, head of the GSEVEE small business and industry association. "180,000 businesses are on the brink and 70,000 of them are expected to close in the next few months."
Higher taxes expected to be levied in the new austerity program will destroy many of the struggling businesses that have managed to weather three years of the crisis so far, he said.
"In 2011, only 20 percent of businesses were profitable. So these new tax measures present small businesses with a choice: Dodge taxes or close your shop."
The country is surviving with the help of two massive international bailouts worth a total €240 billion ($315 billion). To secure them, it has committed to drastic spending cuts, tax hikes and reforms, all with the aim of getting the state coffers back under some sort of control.
But while significantly reducing the country's annual borrowing, the measures have made the recession worse. By the end of next year, the Greek economy is expected to be around a quarter of the size it was in 2008. And with one in four workers out of a job, Greece has, along with Spain, the highest unemployment rate in the 27-nation European Union.
The country's four-month-old coalition government is negotiating a new austerity package with debt inspectors from the EU, International Monetary Fund and European Central Bank. The idea is to save €11 billion ($14.4 billion) in spending — largely on pensions and health care — and raise an extra €2.5 billion ($3.3 billion) through taxes.
After more than a month and a half of arguing, a deal seems close. On Wednesday, representatives from the EU, International Monetary Fund and European Central Bank, said there was agreement on "most of the core measures needed to restore the momentum of reform" and that the rest of the issues should be resolved in coming days.
Greece is also seeking a two-year extension to its economic recovery program, due to end in 2014. Without the extension, it would need to take €18 billion worth of measures instead of the €13.5 it is currently negotiating.
Athens hopes to get the next loan installment around mid-November. Prime Minister Antonis Samaras has said the country will run out of cash by the end of that month, meaning Greece would most likely have to default on its debt and potentially end its membership of the euro currency.
Nicholas Paphitis and Elena Becatoros in Athens contributed.
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