ATHENS - Police fired tear gas at stone-throwing youths in central Athens on Wednesday, where thousands of striking state sector workers marched against cuts the government says are needed to save the nation from bankruptcy.
A small number of youths broke up marble paving slabs and hurled the chunks of rock at police in full riot gear, who responded by firing tear gas grenades.
Flights were grounded, schools shut and government offices closed in the first nationwide walkout in months. Labour leaders call it the start of a campaign to derail emergency austerity steps launched last month by a government that has already imposed two years of tax hikes and wage cuts.
Greece's debt crisis poses a threat to the viability of the 17-nation euro currency zone. Reforms to Greek finances took on a new urgency this week after the announcement that Athens would miss its 2011 deficit target.
Thousands of state workers, pensioners and students had gathered peacefully, beating drums and waving banners reading "Erase the debt!" and "The rich must pay". They marched into the square outside parliament where lawmakers were debating holding a referendum on the response to the fiscal crisis.
In June, more than 100 people were injured in clashes between demonstrators and police in Syntagma Square. A police official said about 1,000 officers were deploying on Wednesday, fewer than during June's protests.
Hospitals ran on emergency staff and some state schools closed. Trains were halted, and more than 400 international and domestic flights were cancelled at Athens airport, an airport spokeswoman said.
Despite its new measures demanded by the EU and IMF, the government was forced to announce this week it would still miss its 2011 deficit target by nearly 2 billion euros, rattling global markets. Polls show nearly four out of five Greeks expect to default on the massive national debt within months.
"We want this government out. They deceived us. They promised to tax the rich and help the poor, but they didn't," said Sotiris Pelekanos, 39, an engineer and one of the striking workers gathered in central Athens.
"I don't care if we go bankrupt. We are already bankrupt. It's just a matter of the state realising it," he said. "We've lost everything."
Greece's main labour unions ADEDY and GSEE expect hundreds of thousands of people to walk off the job.
"They are not trying to save Greece. They are just killing workers," ADEDY Vice President Ilias Vrettakos said in a speech during the rally. "They should get the money from the rich, not from us."
Away from the demonstrations, the streets of the capital were calm. The private sector did not participate in the strike but will take part in a bigger general strike on Oct. 19.
Many in the Greek private sector resent the perks of state workers, who make up about a fifth of Greece's work force and are protected from layoffs by the constitution.
SCRAMBLE TO PROTECT BANKS
Greece's 2011 deficit target was written into a 109 billion euro bailout package agreed in July -- the second huge bailout in two years -- and if its terms need to be renegotiated, European banks that hold Greek debt could suffer a heavier blow.
EU officials are scrambling to protect banks from a repeat of the crisis that froze the world financial system in 2008.
They have postponed until mid-November a decision on whether to approve the next 8 billion euro ($10.7 billion) tranche of bailout loans, giving negotiators more time to press the government to enact promised reforms.
Finance Minister Evangelos Venizelos said on Tuesday Greek finances for this year could slip even further if the country failed to rally round the reforms and show "national cohesion and solidarity".
His government has promised to hold a referendum on the fiscal crisis this autumn, although it has not said what question Greeks would be asked or when it would be held. Parliament debated the referendum law on Wednesday even as the protesters were gathering in the streets outside.
The country's main labour unions, representing about half of Greece's 5 million-strong work force, have staged repeated strikes since Athens asked the European Union and International Monetary Fund for a first bailout last year.
They say salary and pension cuts, tax hikes and layoffs hurt the poor and prevent the economy from emerging from three years of recession.
"The government is panicking and has no strategy," said Thessaloniki port (OLTr.AT) unionist Fani Gourgouri. "These measures are only extending poverty. We'd be willing to shoulder the cost and say 'yes' to austerity if they proceeded with reforms that would create jobs instead of cutting them."
Analysts say the ruling Socialists, who face dissent within their own ranks and lag behind the conservatives in polls, have no choice but to implement the EU/IMF-prescribed reforms despite protests.
(Additional reporting by Tatiana Fragou and Daphne Papadopoulou; Writing by Peter Graff; Editing by Mark Heinrich)