Greece tries to calm global markets

Greece moved Tuesday to calm global markets spooked by its debt crisis.

The government promised to increase retirement ages, accelerate economic reforms and reduce the country's debt.

The pledges came on the eve of the first nationwide strike against new austerity measures.

Prime Minister George Papandreou told a cabinet meeting that the reforms "must go ahead now ... with greater speed."

"Our primary duty now is to save the economy and reduce the debt, aiming to do so through the fairest possible solutions that will protect — as far as that is possible — the weaker and middle classes," he said.

Spending cuts

Greece is trying to reduce a budget deficit that now represents 12.7 per cent of the value of its total economic output last year.

The government has announced spending cuts of $2.74 billion US as well as measures to head off tax evasion, which is rife. But it has shied away from further salary cuts or layoffs in a civil service that employs 750,000 people, all with guaranteed lifetime jobs.

On Tuesday, it announced a two-year increase in the average retirement age, to bring it to the age of 63 by 2015.

The reforms announced so far have angered powerful labour unions, and civil servants have called a nationwide strike Wednesday.

The walkout will affect state schools, hospitals, tax offices and local government offices, while all Greek airports will be closed to international and domestic flights.