| GEO Business|
| European countries, IMF offer Greece $146 billion in loans|
| Updated at: 1240 PST, Monday, May 03, 2010|
BRUSSELS: European countries and the International Monetary Fund threw Greece a lifeline worth a stunning $146 billion after the financially foundering nation unveiled a stinging program of spending cuts and tax hikes to reduce its enormous government deficit.
At an emergency meeting in Brussels, finance ministers from the 16 nations that use the euro currency signed off on the bailout package, which would grant low-interest loans to Athens to help it avoid a humiliating bankruptcy. The money would be available over the next three years and would come from the International Monetary Fund and fellow Eurozone countries such as Germany and France.
Officials hope the loans will keep the debt crisis from spreading beyond Greece to other Eurozone countries whose finances are in shaky condition, particularly Portugal, Spain and Ireland, which are also struggling to contain big budget deficits.
In Greece, workers have been mounting furious protests against the prospect of drastic government cuts. Officials are bracing for a general strike Wednesday over the new austerity plan, which includes higher fuel, tobacco, alcohol and sales taxes, cuts in military spending and the elimination of two months' annual bonus pay for civil servants.
Axing the bonus is a particularly fraught move in a country where as many as one in four workers is employed by the state. But with a whopping government deficit amounting to 13.6% of gross domestic product, Greece must dig deep.
Markets continued to push up Athens' cost of borrowing to punishing levels. Credit-rating firms stoked fears of a domino effect last week by downgrading Spain and Portugal. And the IMF and EU were forced to scramble to put together a bigger bailout package to reassure nervous investors.