Greece heads for strike standstill, IMF warns on finances

Greek unions are set to bring the country to a standstill on Wednesday despite a warning from IMF chief Christine Lagarde that the countrys financial hole is growing because reforms have lagged.Civil servants, teachers, lawyers, sailors and other professionals across the country have been called by their unions to the 24-hour walkout, the third this year against planned new cutbacks in an economy already deep in recession.S0S - save the country, but above all its people, leading unions GSEE and ADEDY said in posters strung from lamp-posts across the capital.Salaries, pensions and benefits have been cut again and again for 2.5 years and the monster of the debt and deficits remains invincible, constantly demanding new sacrifices, the unions said in a statement.Two general strikes were held against a previous austerity package in February but this is the first walkout to test the three-party coalition government headed by conservative Prime Minister Antonis Samaras that came to power in June.Samaras government seeks to impose another austerity package -- pending since June -- worth 11.5 billion euros ($15 billion) in savings and two billion euros in extra tax revenue to unblock access to frozen EU-IMF loans.A loan instalment of 31.5 billion euros is at stake, needed by Athens to pay state salaries and pensions, recapitalise Greek banks hit by a state debt rollover and repay over six billion euros owed to private contractors.But even this latest drive of cuts might not be enough to get Greeces troubled rescue and reform operation back on the rails.International Monetary Fund chief Christine Lagarde warned on Monday that delays in implementing Greeces bailout programme, including privatisations, had increased the countrys financing shortfall.As a result of the major delay in privatisation (...) and the limited revenue revenue collection, theres a financing gap, especially if factoring in more time, Lagarde told an audience at the Peterson Institute for International Economics.We dont 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.The fiscal program is supposed to run to 2014, but Greece has said it wants this deadline extended to 2016.A European Union summit on October 18 and 19 is expected to decide on the Greek request.An audit by senior representatives of the EU, the IMF and the European Central Bank -- Greeces so-called troika of creditors -- this week suspended talks with the government on finalising the austerity package.The IMF and EU indicated the pause was scheduled but reports surfaced of a showdown with Finance Minister Yannis Stournaras and IMF mission chief Poul Thomsen over requests for higher cuts to salaries and pensions.The package already reportedly contains a controversial hike to the age of retirement from 65 to 67 years, and another round of cuts to civil servant wages.Separate protests by the unions will be held in Athens on Wednesday.No trains will be running and ferries will be confined to harbour.Greek journalists also plan a four-hour stoppage during the day.The association of Greek traders has also called on its members to shut down their businesses nationwide, though such mobilisations in the past have not been followed rigorously.