* Police fire tear gas at stone-throwing youths
* Trains halted, flights grounded in nationwide strike
* State workers protest against wage cuts, layoffs
(Updates protests, adds troika source, GDP figures)
By Renee Maltezou and Yannis Behrakis
ATHENS, Oct 5 Riot police fired teargas at
stone-throwing youths in central Athens on Wednesday as
thousands of striking Greek state sector workers marched against
cuts the government says are needed to save the nation from
Youths broke up marble paving slabs in central Syntagma
Square and hurled the chunks at police in full riot gear. The
police responded by firing teargas grenades and chasing the
protesters through the square and into surrounding streets.
Flights were grounded, schools shut and government offices
closed in Greece's 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 worsening debt crisis poses a risk to the euro
currency and the international financial system. Reforms to
Greek finances took on a new urgency this week after the
government announced it 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.
Reuters saw one bare-chested man covered in his own blood,
rescued by bystanders after clashing with demonstrators.
Protesters tried to storm an Economy Ministry building,
shattering heavy glass at the entrance.
Sporadic scuffles between baton-wielding police and
stone-throwing youths continued for several hours.
Police said at least two police and two civilians were hurt
and 12 people detained. Violence was far milder than in June,
when more than 100 people were injured in battles between
demonstrators and police in Syntagma Square.
The strikes forced hospitals to run on emergency staff and
the closure of some state schools. Trains were halted, and more
than 400 flights were cancelled at Athens airport. The Athens
Acropolis and major museums were shut.
Despite its new measures demanded by the EU and IMF, the
government was forced to announce this week it would still fall
short of its 2011 deficit target by nearly 2 billion euros,
rattling global markets. Polls show nearly four of five Greeks
expect a 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."
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 rally
speech. "They should get the money from the rich, not from us."
Private sector workers 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 perks of state workers, who are
protected from layoffs by the constitution.
SCRAMBLE TO PROTECT BANKS
Greece's announcement this week that it would not meet its
2011 deficit target has put in doubt the viability of a 109
billion euro bailout agreed in July -- the second huge bailout
in two years. If that deal must be renegotiated, European banks
that hold Greek debt could suffer a heavy 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.
A senior official from the "troika" of EU, IMF and European
Central Bank negotiators in Athens since last week, told Reuters
the tranche would probably be approved, but only if the
government proves first it can enact reforms.
In more bad economic news on Wednesday, Greece's statistics
agency produced revised numbers showing that recession began
nearly four years ago, a year earlier than previously thought.
The government now says the economy, which was to have resumed
growth next year, will instead shrink by another 2.5 percent.
Finance Minister Evangelos Venizelos said on Tuesday Greek
finances for this year could slip even further behind its target
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 but has not said what question Greeks
would be asked. Parliament debated the referendum law on
Wednesday as the protesters gathered outside.
Labour unions say the recession has been prolonged and
deepened by government salary cuts, tax hikes and layoffs.
"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."
(Additional reporting by Ingrid Melander and Harry
Papachristou; Writing by Peter Graff)