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Greece to add new austerity measures in return for aid

From Elinda Labropoulou, For CNN
A "people's general assembly" in Athens during protests against the austerity measures on June 1, 2011.
A "people's general assembly" in Athens during protests against the austerity measures on June 1, 2011.
STORY HIGHLIGHTS
  • The new measures call for extra taxes for employees and pensioners
  • Daily strikes and demonstrations are already common
  • Greece's main labor unions have called a general strike on June 15
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Athens, Greece (CNN) -- Greece is set to impose further austerity measures and a number of privatization plans in return for more international aid to avoid defaulting on its debt.

The move comes after a 110 billion euro European Union, European Central Bank and International Monetary Fund bailout last year has failed to cover the country's needs.

The Greek prime minister, George Papandreou, was scheduled to present his government's plans to the Eurogroup chairman, Jean-Claude Juncker, in Luxembourg Friday. Papandreou was expected to give Juncker details on a medium-term fiscal plan that will aim to raise an extra 28 billion euros by 2015.

Part of that money is expected to come from the sale of state assets. The plan also includes extra taxes for employees and pensioners.

The additional measures come at a time when daily strikes and demonstrations are being held across Greece against existing plans. Thousands of people were in their tenth day of protest Friday at Athens' main square and there have been several outpourings of anger in recent days against ruling politicians by angry crowds.

Friday morning a group of protesters from the communist-affiliated union PAME was holding a sit-in at the finance ministry, blocking entrance. Protesters also hung a banner at the ministry building calling for a general strike against additional measures. In a statement, protesters referred to the measures as "barbaric."

Greece's main labor unions have called a general strike on June 15.

The government has failed to achieve political consensus on its policy and there is opposition to additional measures within the ruling party, with a group in parliament asking for a full-party debate on the issue. A cabinet meeting was to be held before additional measures were announced.

Greece was hoping to return to the markets to help fund its deficit but with borrowing costs being prohibitively high this has left Greece with very little negotiating power. Earlier this week, ratings agency Moody's cut its rating of Greece to one of the worst levels possible, only slightly above recently-defaulted Ecuador.

Last week, the IMF threatened to veto the release of the latest 12 billion euro portion of Greece's existing rescue package because the country could not guarantee its solvency. Greece's creditors are were expected Friday to announce a decision on the release of that money.