Greek Crisis: Debt Deal ‘Close’ as Clock Ticks Down

Greece could face a default and expulsion from the eurozone within hours unless the three-pronged coalition government can agree the terms of the new austerity package.

Under intense pressure from bailout creditors, Greece's Prime Minister Lucas Papademos must cut thousands of public sector jobs as part of the conditions of the €130bn (£108m) bailout package funded jointly by the country's eurozone partners and the International Monetary Fund (IMF).

But a well-briefed source close to the national government told the International BusinessTimes UK: "A deal is really close [between the coalition partners]. After they agree it must be ratified by parliament."

A general strike stopped train and ferry services nationwide, while many schools and banks were closed and state hospitals worked on support staff.

Unions were planning two protest marches in central Athens, which will be closely policed because previous demonstrations over the past two years of economic pain have turned violent. In May 2010, three workers died in an Athens bank torched by rioters.

Papademos's government caved in to creditor demands to cut civil service jobs, announcing that 15,000 positions would go this year, out of a total of 750,000.

His decision broke a major taboo, as state jobs had been protected for more than a century to create political stability.

The EU and IMF are also pressingGreece to deeply cut the €751 a week minimum wage. That could lead to knock-on reductions in private sector salaries and unemployment benefit. Unions and employers' federations have called the measure unfair and unnecessary.

In the private sector, unemployment has hit a record high of more than 19 percent in a fifth year of recession.

Athens must placate its creditors to clinch a €130bn bailout deal from the eurozone and the IMF and avoid a March default on its bond repayments.

"It is clear that there is a lot of pressure being put on the country. A lot of pressure is being placed on the Greek people," Finance Minister Evangelos Venizelos said .