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Greece heads for standstill before austerity vote

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Oct. 17, 2011, 7:45 a.m. | World — by Reuters

Greece faces a crucial test this week with much of the country expected to be shut down by a 48 hour strike.
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ATHENS - Greece faces a crucial test this week with much of the country expected to be shut down by a 48 hour strike that will culminate on Thursday as parliament votes on a sweeping package of austerity measures demanded by international lenders. Greece's two main unions, representing about half of the four million-strong workforce, have promised one of the biggest strikes since the start of the crisis two years ago, hitting food and fuel supplies, disrupting transport and leaving hospitals run by skeleton staff.

Prime Minister George Papandreou, trailing badly in opinion polls, has defied the protests, pledging to push through a deeply unpopular package that includes tax hikes, pay and pension cuts, job layoffs and changes to collective pay deals.

His four-seat majority is expected to hold up with the support of smaller opposition parties, but at least two members of the ruling PASOK party could oppose part of the bill when the vote is called, probably in two stages on Wednesday and Thursday.

With European Union leaders racing to prepare a comprehensive new bailout deal in time for a meeting on Oct. 23, Finance Minister Evangelos Venizelos said it was the week "during which many things, maybe everything will be decided".

Trapped in deep recession and strangled by a public debt equivalent to some 162 percent of gross domestic product, Greece has been shut out of bond markets and would run out of money within weeks without international support.

Many economists believe Athens can no longer avoid defaulting on its debt but in a newspaper interview on Sunday, Papandreou said a default would be a "catastrophe" for Greece.

Inspectors from the EU and International Monetary Fund were in Athens last week and have recommended releasing a vital 8 billion euro aid tranche to enable the government to keep paying its bills past November.

But that will only provide temporary relief and they have urged Papandreou's struggling Socialist government to push ahead with further belt-tightening, on top of what are already the deepest cuts in Greece's postwar history.

VIOLENCE


With memories still fresh of the violent clashes between riot police and anti-austerity demonstrators in June, police will be taking extra precautions to crack down on signs of trouble during the strikes this week.

"We are fully aware of the huge changes in people's lives and the problems the economic crisis poses to public services," the ministers for health, education and transport said in a joint statement published on their websites.

"But either we do everything now or we face disaster," they said, calling for unity from all PASOK deputies.

"Obstructing the operations of the state in sensitive sectors is an attempt to worsen conditions and undermine the fight the country and its citizens are engaged in."

The strike on Wednesday and Thursday will hit public sector institutions including tax offices, state schools and airports as well as banks and businesses ranging from taxis and clothes shops to suppliers of everyday staples like bakers.

Even the country's judges will hold indefinite stoppages, only issuing rulings on major cases.

Customs officials who clear fuel refinery deliveries hold a 24 hour strike on Monday and will decide whether to extend their action, potentially hitting petrol supplies.

However public transport services in Athens are expected to be operating at least some services to ferry demonstrators to the main site of the protest in Syntagma Square, outside parliament.

Papandreou's ruling PASOK party has seen its ratings drop sharply in recent months as it meets the tough terms of EU and IMF aid, and has seen state buildings occupied and daily protests by groups ranging from taxi drivers to lawyers and municipal workers.
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