Police fired tear gas 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 European Union and International Monetary Fund 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.

Riot police clashed with the youths in black hoods just meters (yards) from where the meetings were being held to decide whether Greece will get a fifth tranche of aid from the 110 billion euro bailout that saved it from bankruptcy last year.

Police said 17 demonstrators and two policemen were hurt in the clashes, including one protester with serious head injuries, while 24 people were detained.

Without the next 12 billion euro tranche, the 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.

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

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, a housewife and mother of three who was protesting in central Athens, said: Enough is enough! They are killing us and our children.

Greek debt prices have stabilized, but markets are braced for some form of restructuring in the long run because Greece is laboring 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.

DEEP RECESSION

The Socialist government has cut salaries and pensions and increased taxes, despite repeated strikes, to meet bailout targets. But such 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 privatizations.

But a euro zone source in Brussels said Greece needed to show credible progress toward meeting agreed targets for fiscal consolidation and privatization 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.

The private sector union GSEE and its public sector sister ADEDY, which together represent about half the work force, say austerity is killing the economy, which shrank 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.

GSEE said there was a 100 percent turnout for the walkout but government officials said only 12 percent of workers at public services participated.

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

We have a duty to lead the country out of the crisis in the best possible way, he told his ministers after some complained about a slowing pace of reforms. We call all of society and all of its forces to mobilize.

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 privatizations by 2015.

(Additional reporting by Yannis Behrakis: Writing by Dina Kyriakidou; editing by Mark Heinrich)

Germany