UPDATE 2-Anti-austerity strike brings Greece to a standstill
* Unions protest against austerity measures
* Strike paralyses transport, hospitals and schools
* Workers to rally outside parliament
ATHENS, Feb 20 (Reuters) - Greek workers held a nationwide strike against wage cuts and high taxes on Wednesday, keeping ferries stuck in ports, schools shut and hospitals with only emergency staff.
The two biggest labour unions brought much of crisis-hit Greece to a standstill during the 24-hour protest against austerity policies which they say deepen the hardship of people struggling through the country's worst peacetime downturn.
Representing 2.5 million workers, the unions have gone on strike repeatedly since a debt crisis erupted in late 2009, testing the government's will to impose the painful conditions of an international bailout in the face of growing public anger.
"Today's strike is a new effort to get rid of the bailout deal and those who take advantage of the people and bring only misery," said Ilias Iliopoulos, secretary general of the ADEDY public sector union which is organising the walkout with private sector union GSEE.
"A social explosion is very near," he told Reuters from a rally in a central Athens square, as police helicopters clattered overhead.
Prime Minister Antonis Samaras's eight-month-old coalition government has been eager to show it will implement reforms it promised the European Union and International Monetary Fund, which have bailed Athens out twice with over 200 billion euros.
It has taken a tough line on striking workers, invoking emergency laws twice this year to order seamen and subway workers back to their jobs after week-long walkouts that paralysed public transport in Athens and led to food shortages on islands.
But in a sign it may be buckling under pressure, it announced on Monday it would not fire almost 1,900 civil servants earmarked for possible dismissal, despite promising foreign lenders it would seek to cut the public payroll.
Greece secured bailout funds in December, ending months of uncertainty over the country's future in the euro zone, and analysts said this had created expectations among Greeks that things would improve for them personally.
"If these expectations are not satisfied by the summer, then whatever is left of the working class will respond with more protests," said Costas Panagopoulos, head of Alco pollsters.
Six years of recession and three of austerity have tripled the rate of unemployment to 27 percent. More than 60 percent of young workers are jobless.
"We need to fight tooth and nail to protect the youth," said pensioner Ioannis Alexiadis, 70, who lives on 470 euros a month.
Most business and public sector activity came to a halt on Wednesday with schoolteachers, train drivers and doctors among those joining the strike. Banks pulled down their shutters and ships stayed docked as seamen defied government orders to return to work.
Labour unrest has picked up in recent weeks. A visit by French President Francois Hollande in Athens on Tuesday went largely unreported as Greek journalists were on strike.
A banner reading "No to the euro" was hung on fencing protecting parliament on the main Syntagma Square, where marches are expected to culminate in demonstrations later on Wednesday. Past protests have often ended in violent clashes with police.
"We're on our knees. The country has been destroyed, the young people have been destroyed," said Nikos Papageorgiou, 56, a civil servant. "I'm outraged with the Europeans and our politicians as well. They should all go to jail."