most believe a potential euro zone and IMF aid deal will further erode living standards if Greece activates it

Struggling to rein in a huge budget deficit and a 300 billion euro public debt load, the socialist administration is slashing spending to halt a crisis that has caused investors to ditch its assets and has shaken the single currency.

Last month, the government cut the pay of about 600,000 public sector workers, froze pensions and raised taxes to reduce its shortfall in public finances this year by almost a third to 8.7 percent of gross domestic product.

Half of those surveyed said their salaries no longer covered their needs. One third said they spent less on clothing and a quarter said they were not eating out as much, the poll, conducted in the capital by Athens Economics and Business University showed.

Seven out of 10 believed the aid deal, if tapped, would lead to a further deterioration of their living standards, while half said Greece's fiscal woes would last more than five years, according to the survey published in To Vima newspaper.

Athens has yet to ask to activate the euro zone and International Monetary Fund aid mechanism. But it has suffered a spike in borrowing costs that is threatening to thwart its deficit-reduction plan, and has asked to start talks with officials on Monday to discuss its details.

At an estimated value of 45 billion euros in the first year, the package would be the biggest multilateral bailout ever attempted. But the prospect of looking for outside help has angered many Greeks.

A poll on Friday showed most of the country's 11 million people were unhappy with the socialist government's performance, although they still supported it over the conservative opposition. Some 66 percent believed social unrest would mount in the coming months.

Greece's most powerful trade unions have staged a series of strikes against the austerity steps since the start of the year and plan more this month. The civil servants union will down tools for 24 hours on April 22. (Reporting by Angeliki Koutantou; editing by Bill Tarrant)

China Yuan Appreciation

In notes prepared for EU delegations for a meeting of finance ministers and central bankers from the Group of 20 countries in Washington on April 23, the EU calls for more yuan appreciation.

Greece Problem Simplified

(CNN) -- European Union leaders have hailed an agreement to use funds from both Europe and the International Monetary Fund to help financially-crippled Greece as important for the euro zone.

So what's the problem in Greece?
Years of unrestrained spending, cheap lending and failure to implement financial reforms left Greece badly exposed when the global economic downturn struck. This whisked away a curtain of partly fiddled statistics to reveal debt levels and deficits that exceeded limits set by the eurozone.

How big are these debts?
National debt, put at €300 billion ($413.6 billion), is bigger than the country's economy, with some estimates predicting it will reach 120 percent of gross domestic product in 2010. The country's deficit -- how much more it spends than it takes in -- is 12.7 percent.

So what happens now?
Greece's credit rating -- the assessment of its ability to repay its debts -- has been downgraded to the lowest in the eurozone, meaning it will likely be viewed as a financial black hole by foreign investors. This leaves the country struggling to pay its bills as interest rates on existing debts rise. The Greek government of Prime Minister George Papandreou, which inherited much of the financial burden when it took office late last year, has already scrapped most of its pre-election promises and must implement harsh and unpopular spending cuts.

Will this hurt the rest of Europe?
Greece is already in major breach of eurozone rules on deficit management and with the financial markets betting the country will default on its debts, this reflects badly on the credibility of the euro. There are also fears that financial doubts will infect other nations at the low end of Europe's economic scale, with Portugal and the Republic of Ireland coming under scrutiny. If Europe needs to resort to rescue packages involving bodies such as the International Monetary Fund, this would further damage the euro's reputation and could lead to a substantial fall against other key currencies.

So what is Greece doing?
As already mentioned, the government has started slashing away at spending and has implemented austerity measures aimed at reducing the deficit by more than €10 billion ($13.7 billion). It has hiked taxes on fuel, tobacco and alcohol, raised the retirement age by two years, imposed public sector pay cuts and applied tough new tax evasion regulations.

Are people happy with this?
Predictably, quite the opposite and there have been warnings of resistance from various sectors of society. Workers nationwide have staged strikes closing airports, government offices, courts and schools. This industrial action is expected to continue.

How are Greece's European neighbors helping?
Led by Germany's Chancellor Angela Merkel, all 16 countries which make up the euro zone have agreed a rescue plan for their ailing neighbor. The package, which would only be offered as a last resort, will involve co-ordinated bilateral loans from countries inside the common currency area, as well as funds and technical assistance from the International Monetary Fund (IMF).

According to a joint statement on the EU Web site, a "majority" of the euro zone States would contribute an amount based on their Gross Domestic Product (GDP) and population, "in the event that Greece needed support after failing to access funds in the financial markets."

This means Germany will be the main contributor, followed by France. Although the announcement did not mention any specific figure, a senior European official quoted by Reuters said that the potential package may be worth around 20 billion euro (US$26.8 billion).

However any European-backed loan package requires the unanimous approval of European Union members, meaning any euro zone country would have effective veto power.

Greece NewsFlash!

-- European governments offered debt- plagued Greece a rescue package worth as much as 45 billion euros ($61 billion) at below-market interest rates

Forced into action by a surge in Greek borrowing costs to an 11-year high

euro-region finance ministers said yesterday they would offer as much as 30 billion euros in three-year loans in 2010 at around 5 percent. That’s less than the current three- year Greek bond yield of 6.98 percent. Another 15 billion euros would come from the International Monetary Fund.

European rhetorical support in February and March failed to prevent Greek 10-year bond yields from soaring to 7.51 percent on April 8

Greece last week raised its estimate of the 2009 deficit from 12.7 percent of gross domestic product to 12.9 percent, the highest in the euro’s history and more than four times the EU’s 3 percent limit.

Greece needs to raise 11.6 billion euros by the end of May to cover maturing bonds, and another 20 billion euros by the end of the year to pay debt coupons and finance this year’s deficit.