Greece was paralysed on Wednesday morning as thousands of workers walked off the job to protest at the government’s austerity measures. The industrial action comes as Prime Minister George Papandreou seeks a loan payment extension from the EU.

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The strike has brought maritime traffic and train services to a halt and disrupted transport in the capital Athens. Public administration offices, schools and banks were also closed on Wednesday.

Tens of flights were cancelled ahead of a walkout of airport controllers. The strike was called by two of Greece’s main trade unions, the GSEE and the ADEDY, who were planning two separate marches on Wednesday.

Trade unions are protesting cuts to state payrolls and efforts to liberalise the economy as Greece struggles to recover from a deep recession in the wake of the financial crisis.

"We demand a mixture of economic policy that will boost employment, incomes, social and labour rights and social cohesion," the GSEE said.

Several general strikes were held last year over tough spending cuts imposed by Papandreou's government in return for a 110-billion-euro loan from the European Union and the International Monetary Fund.

Recent data show that Greece's recession has deepened, with the economy contracting by a worse-than-expected 4.5 per cent last year, theWall Street Journal reports. Unemployment has risen to 13.9 per cent, while youth unemployment reaching 35.6 per cent.

Many analysts doubt that Greece will be able to honour its payments, as Papandreou embarks on a European tour to convince European leaders to extend his country’s loan repayment.

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