Greece talks to lenders ahead of national strike showdown over reforms

International lenders were locked in talks with Greece in a crucial first assessment of compliance with bailout terms on Wednesday, the eve of a national strike called to protest at pension reforms mandated by the deal.

Greece must introduce a raft of pension reforms to win a positive assessment from lenders of its level of adherence to conditions of an 86-billion-euro bailout that deeply indebted Athens signed up to in 2015.

Approval would pave the way to discussions on debt relief desperately needed by the cash-starved nation.

Greece needs to save 1.8 billion euros, the equivalent of 1 percent of its economic output, from pension reforms. It also needs to raise about 350 million euros from tax hikes to achieve a primary surplus of 0.5 percent of GDP.

Leftist Prime Minister Alexis Tsipras has vowed not to cut pensions to overhaul the system, but increase social security contributions instead. The Greek government has also suggested an increase in income tax on high earners to about 50 percent, from 42 percent at present, a government source said.

"The lenders have not asked for cuts in main pensions. So far they are listening and evaluating the government's proposals on pension and fiscal reform," the official said.

Private and public sector unions have called for a national strike on Thursday.

Traffic on Greece's northern border with Bulgaria snarled to a halt thanks to a blockade of roads by farmers angry that social insurance reforms will hit them hard in the pocket, hard on the heel of tax increases last year.

Witnesses reported queues up to 12 km (7.5 miles) long of trucks waiting to cross the border, with drivers in line for about two days.

"The produce is turning rotten. We don't have food, there is no gasoline. My colleagues and I want to know how long we will have to stay here. We are not to blame. We didn't do anything wrong to be punished in this way," said Ivan Atanasov, a truck driver from Bulgaria.

But Greek farmers promised to keep up the blockade.

"We aren't leaving until the government backs down," farmer Stephanos Yiannaros said at the Promahonas border that Greece shares with Bulgaria. "If these measures are passed it will be the nail on the coffin for farmers. We will all have to migrate," he told Reuters.

Farmers were expected to be at the forefront of demonstrations scheduled across Greece on Thursday, including in central Athens.

[Reuters]