Greek public sector workers blocked the entrances to several ministries on Tuesday to protest against austerity measures, disrupting talks with EU and IMF inspectors on a vital aid tranche.

The Socialist government, which came to power two years ago on a pledge to help the poor and tax the rich, is facing growing anger from voters hit hard by a series of tax hikes and wage cuts agreed to stem a debt crisis.

Athens admitted on Sunday that it will miss its 2011 deficit target despite the harsh austerity steps and approved unpopular plans to put tens of thousands of public sector workers into a labor reserve on the road to redundancy.

There is very big turmoil and very deep anger in society, the secretary general of public sector union ADEDY, Ilias Iliopoulos, told Reuters as he took part in the protest, which blocked access to several buildings including the Finance Ministry.

Today's protests mainly have to do with the labor reserve and firings. But there is also the new budget which brings new measures against the people, he said, a day before a 24-hour strike by the public sector union and state utility workers.

Fears of a debt default drove the Athens stock exchange to an 18-year low on Tuesday. Greek bank stocks went down as much as 8 percent. The euro hit a nine-month low against the dollar and a 10-year low against the yen.

Protesters also blocked the entrances of other public buildings including the labor, agriculture, culture and development ministries, a police official said. They did the same on Thursday and Friday, when an EU/IMF inspection of Greece's finances started.

About 20 protesters from communist-affiliated union PAME briefly occupied the office of the Labor Minister.

Planes and trains will be halted on Wednesday, schools will be shut and hospitals will have only limited staff as workers walk off the job to protest against austerity.

APPLY PRESSURE

Euro zone finance ministers agreed on Monday that Greece could afford to wait until mid-November, rather than mid-October, to receive the next 8-billion-euro installment from its aid program.

That gives inspectors from the European Union, International Monetary Fund and European Central Bank, known as the troika, more time to apply pressure on Athens to carry out reforms.

The euro zone ministers are also reviewing the size of the private sector's involvement in a second international bailout package, a move that could undermine the aid program and hasten the threat of a default.

In a meeting with Labor Minister George Koutroumanis, troika officials raised the issue of lowering the minimum wage of about 740 euros a month, to boost firms' competitiveness, further angering unions.

They operate like the crusaders of a neo-liberal obsession, Yannis Panagopoulos, president of private sector union GSEE said on NET radio. They will have cheap labor, but with this ... the country will sink into a deeper recession.

The government said on Monday the country will remain in recession next year, threatening its efforts to put its finances back on track and claw its way out of a debt crisis shaking the euro zone, with more belt-tightening looming.

The economy will suffer a fourth consecutive year of contraction, shrinking by 2.5 percent in 2012 after an expected 5.5 percent slump this year, according to the 2012 budget draft.

(Reporting by Angeliki Koutantou; Writing by Ingrid Melander; Editing by Janet Lawrence)

International Monetary Fund