ATHENS – Tens of thousands of Greeks marched on parliament and workers launched a national strike on Wednesday to protest against the government's efforts to approve new austerity measures for the debt-stricken euro zone state.
Prime Minister George Papandreou must push through a new five-year campaign of tax hikes, spending cuts and sell-offs of state property to continue receiving aid from the EU and International Monetary Fund and avoid default.
He not only faces public protests and resistance from a conservative opposition that has surpassed his Socialist party in opinion polls, but a few backbenchers in his own parliamentary grouping are also threatening to reject the plan.
Political analysts said he would be able to push through the package with support from his PASOK party and possibly a handful of opposition deputies, but that protests had introduced some uncertainty. One PASOK deputy defected on Tuesday, reducing the party's number of seats in parliament to 155 out of 300.
Thousands of activists and unionists converged on the central Syntagma square on the parliament's front steps to try to stop lawmakers from debating the bill.
“Thieves, traitors!” many chanted. “Where did the money go?”
“These measures are not taking us anywhere. They only lead to unemployment, hunger and poverty,” said Panayotis Dounis a 60-year-old pensioner. “We wouldn't be here if the politicians had made sacrifices as well. We are absolutely disappointed.”
Around 1 500 police closed a swathe of the city centre and erected 2m metal barricades in front of the assembly.
Riot police created a corridor and fired tear gas to drive back jeering protesters as lawmakers drove up to the building in official limousines. Several demonstrators pelted Papandreou's car with oranges as he drove past, a police official said.
Unions representing about half of Greece's 5 million-strong workforce stopped work for 24 hours. Trains stopped, ports closed and hospitals cut staffing. Airports stayed open.
The deal foresees €6.5 billion (about R63 billion) in tax hikes and spending cuts this year, doubling measures agreed with bailout lenders that have pushed unemployment to a record 16.2 percent and extended a deep recession into its third year.
The government has appealed for national consensus on the laws, on which the EU and IMF have conditioned the release of another €12 bn in aid next month that Athens needs to pay off maturing debt or face default.
“We are fighting the battle to serve the common good, in the most crucial moment in the country's modern democracy,” government spokesman George Petalotis told reporters.
The plan includes new luxury taxes, a crackdown on tax evasion; tax hikes on soft-drinks, swimming pools, restaurant bills and real estate; and cutting the Mediterranean state's 750,000-strong public work force by a fifth.
With those and other measures worth total savings of €28 bn through 2015, it also aims to raise €50 bn by selling off state-owned firms.
On Tuesday, euro zone finance ministers failed to reach agreement on how private holders of Greek debt should share the cost of a new bailout for Athens worth an estimated €120 bn before a June 23-24 summit.
The European Central Bank opposes such a move, saying that if such participation is involuntary it could be deemed default that could shock markets and put weaker euro states at risk.
The lack of agreement pushed the cost of insuring Greek debt against default to a new record high on Wednesday, while shares in Greek banks fell 7 percent on fears of political uncertainty.
Papandreou was due to meet President Karolos Papoulias in the early afternoon when he is expected to appeal for support.
The PASOK deputy who defected said he could not back the package. “You have to be as cruel as a tiger to vote for these measures. I am not,” George Lianis said in a letter to Parliament Speaker Filippos Petsalnikos on Tuesday.
Another PASOK member said he would vote against it. But analysts said the party, which still holds a majority, would pass the package by the end of the month before working on another set of laws on how to implement it.
“I don't believe that there are so many PASOK members of parliament who could bear the fall of the government on their shoulders,” said Costas Panagopoulos of pollster ALCO.
“It will be a difficult vote, but it will pass.”
The cabinet is also expected to survive the turmoil in the short term. A poll on Sunday showed 62 percent of Greeks expect the government to call early elections before its term ends in 2013, although 59 percent thought they did not need a vote now. – Reuters