Greece's lenders are sending a team to Athens to inspect a government austerity plan they want implemented in exchange for aid, while Germany suggested a new bailout may have to be renegotiated

Facing a wave of strikes and protests, Greece's Socialist government is accelerating its debt strategy to meet the terms of an International Monetary Fund and European Union rescue deal so it can receive a new loan next month and avoid bankruptcy.

The "troika" team of inspectors, which had threatened to cut off aid if Athens did not move faster, will begin talks tomorrow on a plan demanded by lenders to deepen budget cuts and raise taxes, which has set off protests not seen since June when riot police fought running battles with activists.

"I can confirm the Eurogroup (of euro zone ministers) will hold an additional meeting as soon as possible, still in October, to discuss the situation of Greece and consider the disbursement of the next tranche," a European Commission spokesman said in Brussels, announcing the troika's return.

German chancellor Angela Merkel suggested that parts of the new €109 billion rescue for the debt-laden country could be reopened, depending on the outcome of the troika's audit.

"We have to wait and see what the troika ... finds and what it will tell us (whether) we will have to renegotiate or not," she told Greek state television NET, without elaborating.

Several hundred activists affiliated with the Greek Communists converged on the finance ministry on Wednesday waving a banner saying "We won't pay!". They planned to burn bills for a new one-off income tax introduced this summer, while Athens and other parts of the country were hit by transport strikes.

Theodoros Pangalos, one of two deputy prime ministers, sought to empathise with Greeks, saying he personally did not have the cash to pay and would have to sell property.

"I've already paid €10,000 in real estate tax and will pay another €7,500," Mr Pangalos told Mega TV, adding: "Because I don't have €17,500, I will have to sell one of the properties."

Based on his wealth and income declaration in 2010, mandatory for members of parliament, Mr Pangalos had income of more than €640,000 and property holdings that include three apartments in Athens, another five elsewhere and 11 land plots.

But the deputy prime minister was low on deposits with just over €17,000 in the bank.

The average annual income in Greece is about €20,000.

If deemed adequate by the inspectors, the new austerity drive will secure an €8 billion loan Greece needs to pay bills and salaries in October and bring it closer to starting a second bailout agreed in July.

As a condition of the visit and to resolve the row with the lenders, the Greek government had promised to send a written assurance outlining its new plan to meet its bailout targets. Its contents have not been made public.

Germany has repeatedly said negotiations about the details of the second rescue deal can begin only when the troika says Greece has qualified to receive a fresh, sixth tranche under the first bailout agreed back in 2010.

At the same time, leaders from around the world have urged euro zone capitals to end a tortuous debate and create a safety net big enough to prevent Greece's problems from spreading to other euro members and triggering a fresh global downturn.

The second bailout aims to ease Greece's debt burden by imposing a 21 per cent loss on private Greek bondholders. However, many economists believe that a 50 per cent loss is necessary to make the country's debt viable.

The Financial Times reported that a split had opened in the euro zone over the deal. Quoting senior European officials, it said as many as seven of its 17 countries argued that the private bondholders should swallow bigger writedowns.

After intensifying debate among economists and policymakers that only a 50 per cent loss would make the country's debt viable, more investors have signed up to the bond exchange plan, Greek financial daily Naftemporiki reported.

Citing an unidentified finance ministry official, it said Greece's weeks-long struggle to lure private bondholders into the rescue plan had ended with it reaching the 90 per cent participation target.

The finance ministry declined to comment on the report.

There is no agreement yet among euro zone governments on whether a renegotiation is needed, including more pain for Greece's bank creditors, or on a US-sponsored plan to leverage the region's rescue fund to give it more firepower.

Germany's Bundestag (lower house) will vote tomorrow on widening the scope of the European Financial Stability Facility bailout fund, as agreed by the EU leaders on July 21st.

Dr Merkel faces a revolt within her conservative camp and may have to rely on support from the opposition Social Democrats and Greens to get the measure approved, damaging her authority.

Late yesterday, police dispersed about 1,000 anti-austerity protesters with tear gas in Athens' Syntagma Square, the epicentre of anti-austerity protests.

Taxi drivers, bus and tram operators staged strikes today, causing long traffic jams leading into the ancient city centre and forcing luggage-hauling tourists scrambling to find rides to the airport.

Other trades ranging from craftsmen, printers and tax officials also staged stoppages and activists planned marches on parliament and the port of Piraeus later in the day.

"I've been trying to find a job for a year now and it's impossible," said Maria Kappa, a graduate of the School of Philosophy in Athens. "I don't see the rich people hurt by this austerity, it's always the poor who have to pay."

Inertia in implementing the bailout deal coupled with European leaders' inability to erect a wider safety net stoked fears a Greek default could bring down other euro zone states such as Italy and Spain and trigger a new global recession.

Angry at the Greek government's slowness in starting reforms, the troika quit talks with Athens this month and threatened to shut off funding unless it mended its ways.

Finance minister Evangelos Venizelos has since drafted a plan to catch up on the delays, which have put the government behind on a goal to cut the budget shortfall to 7.6 per cent of gross domestic product this year.

In the accelerated strategy, the government will cut the 730,000 public workforce by a fifth, reduce the public wage bill by 20 per cent, as well as lower overall pensions by 4 per cent in addition to a 10 per cent cut already agreed in previous plans.

It will also now extend the new property tax until 2014, two years longer than originally planned, after the troika judged Greece's estimate that it would raise €2 billion a year to be two times too high.

The EU and the IMF say Greece has been focusing too much on one-off tax measures to plug its budget gap rather than streamlining the administration and cutting spending.

Reuters