Police fired teargas at dozens of youths hurling stones in central Athens on Wednesday and a strike against austerity brought much of Greece to a halt during talks on the next slice of a bailout package.

Senior EU and IMF inspectors met Finance Minister George Papaconstantinou at the start of a visit to Athens to press Greece to shore up its finances one year into the EU/IMF deal.

Police clashed with the youths just metres from where the meetings were taking place to determine whether Greece will get a fifth aid tranche from the 110 billion euro bailout that saved it from bankruptcy last year.

Police said about 20,000 protesters marched to parliament to mark a nationwide 24-hour strike against wage cuts and tax hikes which unions say are strangling the economy, a smaller number than previous protests.

Athens was nearly deserted with many shops and public services closed and posters reading: "We can't take it any more. The rich and the tax evaders should pay."

Litsa Papadaki, 60, housewife and mother of three protesting in central Athens said: "Enough is enough! They are killing us and our children."

Without the next 12 billion euro tranche, key to paying 13.7 billion euros of immediate funding needs, Greece would effectively default.

The IMF and EU officials will also consider giving Athens improved loan terms or more aid to avoid restructuring its huge debt. Investors say a restructuring, imposing losses on private bondholders, is inevitable without more funds.

Euro zone officials including German Chancellor Angela Merkel say they will wait for the result of the inspection visit before taking any decisions.

Greek debt prices have stabilised, but markets are braced for some form of restructuring in the long run as Greece labours with a 327 billion euro debt mountain.

Ten-year Greek bonds were changing hands at around 55 percent of their face value, carrying a secondary market yield of 15.696 percent -- little changed on the day, but up more than 3 percent since the start of the year.

"Cuts"

The Socialist government has cut salaries and pensions and increased taxes, despite repeated strikes, to meet bailout targets but the measures have plunged the country into a deep recession and crimped tax revenues, hampering efforts to tackle a debt of nearly 150 percent of GDP.

The nationwide strike grounded flights and halted shipping. Hospitals were operating on skeleton staff, schools were closed and city transport was disrupted. Only emergency flights were allowed between 0900 and 1300 GMT.

Greek newspapers reported on Wednesday that Greece was nearing agreement for supplementary EU/IMF loans of 50-60 billion euros to cover its funding gap in 2012 and 2013 in exchange for bold privatisations.

But a euro zone source in Brussels said Greece needed to show credible progress on meeting agreed targets for fiscal consolidation and privatisation of state assets before further emergency funding could be considered.

Ministers are now conceding that Greece cannot regain investor trust to go back to the markets for finance in 2012 and analysts say the government faces difficult choices.

"More austerity is probably not good for the economy, because it will deepen the recession and we don't know whether it is going to produce results in terms of fiscal consolidation," said Diego Iscaro from IHS Global Insight.

"On the other hand, people will start losing faith in the government strategy."

Private sector union GSEE and its public sector sister ADEDY, which represent about half the workforce, say austerity is killing the economy, which contracted by 4.5 percent in 2010 and is expected to shrink by another 3 percent this year.

Unemployment jumped to a record 15.1 percent in January.

Prime Minister George Papandreou will chair a cabinet meeting on Wednesday, the second is an many days as he tries to rally support for new fiscal and privatisation plans and quell mounting discontent among party ranks.

"Papandreou told his ministers to be confident in the strength of the Greek people," said a government official who requested anonymity after Tuesday's cabinet meeting, called after some ministers complained about a slowing pace of reforms.

The EU and IMF mission chiefs will be in town for about a week, after experts started the audit in early May. Officials said they would focus on a 2011-2015 fiscal plan and on progress in raising 50 billion euros from privatisations by 2015.

Reuters