Greek workers rally to protect pensions, wages

ATHENS, May 1 (Reuters) Thousands of angry Greeks today took to the streets, turning a May Day rally into a protest over the government's handling of pension fund assets.

An estimated 7,000 demonstrators marched towards the economy ministry in the centre of Athens and public transport workers staged stoppages.

State carrier Olympic Airways joined the walkout, cancelling 42 flights and leaving only one flight per destination. Ferries were tied at ports through the day.

Chanting slogans against the government over the suspected overpriced sale of a bond to a state pension fund, demonstrators demanded the government secured pension funds assets.

''You robbed the funds, you robbed the people, hands off our pensions'', demonstrators chanted.

The bond affair led to the sacking of the labour minister on Saturday.

''Give us back our money, we want back every euro lost because of bonds'', said Alekos Kalyvis vice president of the private sector umbrella union, GSEE, in a speech.

''The workers' main demand is...the return of money to the funds, to decide who is to blame, improving pension funds and guaranteeing pension funds' assets,'' GSEE said in a statement.

Unions demanded big pay hikes in collective wage agreements, the creation of more jobs and improved working conditions.

The government, in power since 2004, has implemented tight fiscal policies that aimed at reducing the budget deficit to the European Union target of below 3 per cent of GDP.

While it has won praise from Brussels for its austerity programme, the government has faced mounting criticism at home with almost daily demonstrations attacking government reforms.

Prime Minister Costas Karamanlis on Saturday sacked labour minister Savvas Tsitouridis over the bond affair that has hurt the government's popularity in an election year.

Press reports and government ministers have said the Greek government structured bond was overpriced when sold to the civil servants' auxiliary fund.

Chief investigator George Zorbas, investigating the case, expects to conclude his probe later this month.

The new labour minister, Vassilis Maginas, has vowed to fight corruption and said the government guaranteed people's pensions.

REUTERS KD HS1915