Greece braces for general strike

Thousands of protesters in Athens plan to surround parliament, creating a human shield to prevent lawmakers from entering the building.

The latest round of cuts comes as the government tries to woo additional bailout funds from international lenders, as the socialist Pasok government kicks off debate over the controversial austerity package .

It is unclear when the vote will be held.

But parliamentary approval of the €78bn cuts, including additional tax hikes, deep slashing of public sector wages and a fire sale of state assets, is critical for securing additional bailout funds.

It comes a year after Greece's European peers and the International Monetary Fund cast the cash-strapped country a €110-bn lifeline to avert default.

Protesters, part of a grass-roots movement modelled on a similar protest in Spain known as Los Indignados, are due to be joined by Greece's two biggest labour unions that organised Wednesday's industrial action and represent about half of the country's five million workers.

It is the third strike to see millions walk out of work since the start of the year, disrupting sea, rail and public transit services across the country.

State bureaus and offices will remain shut as large crowds of mainly public servants, including doctors and police officers, are due to rally in Athens and scores of other cities.

Swelling social unrest has rattled the socialist government as a series of its politicians have kicked up a storm of dissent and resistance against the austerity measures.

On Tuesday, former sports minister Yannis Lianis publicly rejected the measures, saying he would vote against them when put to parliament later this month.

The markets also remain skittish, and Standard and Poor's rating agency has downgraded Greece by three notches, making it the lowest-rated country it covers worldwide and raising the spectre of Greek default.

The downgrade came as official data in Athens showed the country was making no gains in reigning in its spending.

A first tier of austerity measures enforced last year plunged the country into a deeper-than-expected recession, with the economy contracting 5.5% in a year.

Unemployment also has shot up to over 16%, with the rate exceeding 40% among young Greeks. Meanwhile tax revenues have plunged, exacerbating the funding shortfall.

Eurozone minister have set a 20 June deadline to come up with a new Greek bailout plan.