Greece hit by rolling blackouts

Greece was hit by rolling blackouts today as employees at the main power utility began 48-hour rolling strikes to protest against the company’s privatisation, part of austerity plans needed to avoid a national debt default.

The sell-off of state assets in the power company is a major step in a €50bn privatisation drive that must be completed by 2015.

It is part of highly unpopular austerity plans, including more tax hikes and spending cuts, that must be passed by parliament by the end of the month if Greece is to get the next €12bn instalment of its €110bn bailout next month.

The troubled Socialist government is also struggling to make up for ongoing budget shortfalls.

Without the funds, Greece will be unable to pay its debts as of the middle of July, triggering a default that would rock financial markets in Europe and abroad.

The power company, known by its acronym DEH, said nine small and large thermoelectric units were already offline as of Monday morning due to the strike, and appealed to consumers to limit their use of electricity, particularly during the midday heat, when air conditioning use is at its peak.

It said it was preparing hour-long power cuts in several areas if that became necessary.

Greece has seen near-daily protests against the belt-tightening that has slashed salaries and pensions in an attempt to stem a ballooning national debt.

The start of the strike came as Greece’s new finance minister, Evangelos Venizelos, was meeting his colleagues from the eurozone in Luxembourg for a second day. Talks overnight did not produce a final agreement on the next instalment of rescue loans or on a broader, second bailout expected in co-operation with the International Monetary Fund.

Also today, the finance ministry said its deficit reduction effort remained off target due to weak revenues during a worse-than-expected recession.

The January-May shortfall was €10.26bn, instead of the targeted €9.1bn. Spending was €736m less than planned, but revenue was €1.92bn short of target, the ministry said.

The figures relate to Greece’s central government deficit, and do not include social security and local government costs, which the European Union also counts.

The country’s embattled prime minister, George Papandreou, is heading to Brussels for meetings with EU President Herman Van Rompuy and European Commission President Jose Manuel Barroso later Monday.

Tomorrow, Mr Papandreou faces a vital confidence vote in the new government he announced on Friday, when he reshuffled his cabinet amid a major political crisis.