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Greek Protests Get Violent After New Austerity Cuts

Police and masked youths clashed in Athens on Wednesday during a nationwide strike in protest at a new round of austerity cuts introduced in return for crucial EU-IMF loans.

Gangs of youths threw firebombs, smashed windows and set fire to garbage on the sidelines of the demonstration near luxury hotels on the capital's central Syntagma square.

The police responded by firing tear gas and stun grenades to disperse them.

Dozens of people were detained, according to a police source, as crowds moved towards the capital's other central square, Omonia, booing and throwing plastic bottles at the special forces that were present.

The protests rallied striking civil servants and private sector workers as well as students and pensioners, who have all been hit by previous rounds of cutbacks in the debt-laden eurozone country.

Nearly 34,000 people marched in Athens and another 18,000 in Thessaloniki, according to the police, in the first general strike to be held since the new government took office in June, bringing the country to a standstill.

Flights, train services and ferries were halted while the public sector, including museums, shut down.

"For the past two-to-three years we've been living an incredible social catastrophe," said Ilias Loizos, a 56-year-old municipal worker.

"My salary has been cut by 50 percent. I have two children and tomorrow I don't know if I'll have a job," he said.

The demonstration left the capital's city center cluttered with piles of smouldering refuse and debris, but cleaning up could prove a challenge: the authorities recently decided not to renew the contracts of 352 garbage collectors.

"This will be a huge problem in collecting the garbage from the city center," especially after demonstrations, 39-year-old Sakis Zeibekis, whose contract was not renewed on Monday despite an 11-year continuous run, told AFP.

It is the first general strike to test the resolve of the coalition government that took office in June to keep recession-hit Greece in the eurozone as it rushes to finalise a package of some 11.5 billion euros ($15 billion) in extra cuts.

Another two billion euros must be raised from taxes under the austerity measures due to be introduced to parliament in early October by the three-party coalition headed by conservative Prime Minister Antonis Samaras.

A finance ministry source said the package had been rubber-stamped by the prime minister and now awaited the approval of coalition partners and international creditors.

Finance Minister Yannis Stournaras will present the completed package to the government's junior partners, socialists Pasok and moderate leftists the Democratic Left, on Thursday, according to the same source.

The new cuts will affect thousands of civil servants who have already suffered salary reductions of up to 40 percent over the last two years.

The age of retirement is also expected to be raised from 65 to 67, just two years after a previous hike.

The austerity package is designed to unblock access to 31.5 billion euros in loans, part of Greece's massive rescue package from the so-called troika of creditors -- the EU, the IMF and the European Central Bank.

Athens needs the money to pay state salaries and pensions, recapitalise Greek banks hit by a state debt rollover and repay more than six billion euros owed to private contractors.

But even this latest round of austerity measures might not be enough to get Greece's troubled rescue and reform operation back on the rails.

Unions say that cutbacks to trim the country's soaring deficit have caused record unemployment and a deepening recession now in its fifth year.

Cutbacks have caused mounting anger in other struggling economies in the eurozone's southern flank.

Over 100,000 people protested in Portugal earlier this month, and on Tuesday more than 60 were injured in Madrid in clashes near parliament.

International Monetary Fund chief Christine Lagarde had warned on Tuesday that delays in implementing Greece's bailout programme, including privatisations, had expanded the country's financing shortfall.

"As a result of the major delay in privatisation... and the limited revenue collection, there's a financing gap, especially if factoring in more time," Lagarde told an audience at the Peterson Institute for International Economics.

"We don't only need 11.5 billion euros of cuts; we need a series of cuts and additional revenues in order to fill in the fiscal gap," she said.

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