New strikes hit debt-hit Greece on Thursday and hopes for growth in its ailing economy were dashed as it came under increasing pressure from its international creditors to accelerate sluggish reforms.
With the government locked in marathon talks on a new wave of austerity measures, Greece's eurozone peers indicated that another rescue deal was on the way, along with a possibility of easier debt terms negotiated with creditors.
"It is obvious that there will be a second programme for Greece," the eurozone's chief policymaker Jean-Claude Juncker told journalists in Luxembourg.
"I am in the middle of negotiating a global solution for Greece," the Luxembourg prime minister added.
Greece received a 110-billion-euro ($160 billion) bailout from the EU and the International Monetary Fund last year, a landmark deal that averted a default.
But with Greek state debt having ballooned to some 350 billion euros and a deeper-than-expected recession lessening the impact of sharp spending cuts, a second bailout is considered unavoidable.
The EU and the IMF have demanded proof of reforms in Athens before approving further aid, which could be more than 90 billion euros from a mixture of new loans, Greek asset sales, and rolling over privately-held Greek debt.
The IMF has also threatened to hold back its next scheduled slice of loan funding -- part of an overall 12-billion-euro instalment Athens needs to pay next month's bills -- if Europe cannot provide a long-term solution to Greece's woes.
European officials are still divided on the question.
Germany supports offering fresh aid to Athens as long as private banks rollover their existing loans to the Greek government, but the European Central Bank insists that any such agreement be approved by creditors first.
"We exclude ourselves all concepts which would not be purely voluntary, without any element of compulsion," ECB chairman Jean-Claude Trichet said, leaving the door open to some sort of agreement with banks and other private creditors.
Hopes for a Greek rebound which would help ease the pain of the austerity medicine were hit meanwhile as first quarter growth figures were slashed to just 0.2 percent from the initial 0.8 percent estimate, showing the economy slowing to a halt.
Worse still, after a series of sales tax hikes last year, inflation is still at 3.3 percent -- although in clear decline.
The Greek government is caught in a vice, trapped between internal dissent and pressure from its international creditors to deliver on a four-year economic recovery plan designed to economise more than 28 billion euros ($41 billion) by 2015, and a 50-billion-euro privatisation drive of state assets.
Employees at state companies earmarked for sale on Thursday staged a 24-hour walkout, supported by civil servants, to reject a wave of fresh austerity cuts imposed after earlier wage and pension cuts came up short last year.
A few hundred unionists from the postal service, state railways, the port of Piraeus and near-monopoly telecoms giant OTE demonstrated in Athens, chanting slogans against the country's painful economic rescue.
"We say 'no' to selling out the country," read one banner held aloft by dock workers.
The government hopes to push the reform package through parliament, where it holds a slim six-seat majority, by the end of June.
Ministers enlisted to brief the ruling party's lawmakers on the package received a dressing-down on Tuesday, with many internal critics arguing that the recovery recipe mandated by Greece's creditors is ill-conceived.
The plan was designed to help Athens regain access to borrowing markets but investors remain unconvinced and credit rates have risen instead of falling.
Tens of thousands of Greeks have been gathering opposite parliament daily over the last two weeks to protest against the austerity policies which are seen to have pushed the economy into an even deeper hole.