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ecb--BRUSSELS: The eurozone faces more turbulence this week, beginning with yet another review of Greece's tortured bailout accord, before Europe-wide strikes against painful austerity policies adopted to tackle the debt crisis.

 

After weeks of relative calm, events gather pace when eurozone finance ministers look again Monday to see whether Greece has done enough to get the funds it needs to avoid default and so keep the single currency bloc in one piece.

 

The devil is in the details. Giving Greece more time to meet its bailout targets costs extra, a difficult option when the European economy is slumping into recession and governments want to cut spending.

 

Austerity was meant to balance the public books and put the economy on track, but across Europe there are increasing calls to put growth first in the face of soaring unemployment caused -- at least in part -- by the cutbacks.

 

Unions have made Wednesday a day of action, attacking governments for following what they see as the diktats of Brussels.

 

In Spain and bailed-out neighbour Portugal, the main unions have called general strikes which threaten to bring both countries to a standstill after massive protests earlier in the year.

 

Greece, the epicentre of the debt crisis, will see another day of demonstrations following protests last Wednesday when parliament approved the latest austerity measures agreed by the government in return for more bailout funding.

 

The Athens parliament votes Sunday on the 2013 budget, another tough dose of medicine.

 

French unions plan action too on a day of solidarity "with the countries in greatest difficulty" while smaller protests are expected in Italy.

 

The European Commission this week slashed its economic forecasts as the debt crisis exacts a heavy toll on growth and government finances but insisted austerity remained the only way forward, with no backsliding.

 

Greece, sunk deep in a recession which has shrunk the economy by a fifth, appears however to have reached the limits, with Greek Prime Minister Antonis Samaras warning the country cannot take any more austerity and must have growth.

 

Samaras has warned that Athens could run out of money by November 16 unless the European Union, International Monetary Fund and European Central Bank clear some 31 billion euros in aid funding.

 

In return, however, the "troika" demanded a new austerity package worth 18.5 billion euros. With it now passed in parliament, the way forward is clearer, and becomes more so if the 2013 budget gets through too.

 

"Greece is doing what it has to do, and so is Europe, the (aid) tranche will be paid," Greek Finance Minister Yannis Stournaras said Friday, adding that Athens expected a decision on Monday.

 

"The Greek authorities have put in an enormous effort amid enormous difficulties, economic, political and social," one EU official said.

 

"The most important thing now is debt sustainability."

 

Greece's total debt next year is put at almost 190 percent of economic output, making a reduction imperative if it is ever to stand on its own two feet again.

 

"We are not far from an accord," said one EU diplomat, adding that there were discussions on giving Athens a two-year extension to 2016 to meet its bailout targets on reducing its mountain of debt and public deficit.

 

The diplomat suggested that there might even be room for a partial deal, tiding Greece over for the time being.

 

Eurozone finance ministers will also review the situation in Spain where Madrid is preparing a costly restructuring of its banking sector, stricken by the bursting of a massive property bubble in 2008.

 

In June, when Spain seemed very likely to follow Greece, Ireland and Portugal in needing a bailout, the EU agreed to provide Madrid with 100 billion euros to stabilise the banks and ease the pressure.

 

The EU diplomat said ministers will review a report from Madrid on the programme, which "is on track," so that a first aid payment can be made.

 

Copyright AFP (Agence France-Presse), 2012

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