Greece to vote on austerity, protests intensify

ATHENS Wed Nov 7, 2012 5:22am IST

Protesters shout slogans during an anti-austerity rally in front of the parliament in Athens November 6, 2012. REUTERS/Yorgos Karahalis

Protesters shout slogans during an anti-austerity rally in front of the parliament in Athens November 6, 2012.

Credit: Reuters/Yorgos Karahalis

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ATHENS (Reuters) - Greece's coalition government hopes to overcome its own divisions and defy protesters' fury at parliament's gates on Wednesday to push through an austerity package needed to secure an injection of aid and avert bankruptcy.

Prime Minister Antonis Samaras is expected to narrowly win support for the cocktail of budget cuts, tax hikes and labour reforms. The smallest party in his conservative-liberal coalition will oppose the measures, leaving him with a margin of just a handful of votes.

Tens of thousands of union workers plan to descend on the assembly in a second day of a nationwide strike that has brought most public transport to a halt and shut schools, banks and government offices.

Backed by the leftist opposition, unions say the measures will hit the poor and spare the wealthy, while also deepening a five year recession that has wiped out a fifth of the Mediterranean country's output and driven unemployment to 25 percent.

"If lawmakers vote in favour of the measures... they will have committed the biggest ever political and social crime against the country and the people," said Nikos Kioutsoukis, secretary general of the private umbrella union GSEE.

"We won't let them destroy the country."

The wage cuts and tax hikes amounting to 13.5 billion euros by 2016 are demanded as the price for the next tranche of more than 31 billion euros from a European Union/International Monetary Fund bailout.

The bailout was put on hold in recent months when it emerged Greece had fallen far short of earlier fiscal commitments.

The vote is the biggest test for Samaras's government since it came to power in June. A 'yes' vote will give Athens cash shore up its ailing banks and pay off debt coming due late this month. A 'no' could rend apart the fragile coalition.

"The road is difficult and steep and it requires sacrifices. Voting for the measures is a one way street. There's no easy way," Finance Minister Yannis Stournaras told deputies.

DIVISION OVER LABOUR

Samaras has said the package will comprise the last cuts to wages and pensions, cold comfort for middle-class Greeks, whose living standards have plummeted in repeated deficit-slashing schemes that have hit wage earners and retirees hardest.

"There are people who are starving and have no food to eat. Pensioners on 300 euros a month are looking through the trash for food," said Christos Papageorgiou, a 67-year-old pensioner and former shipyards worker. "The politicians need to leave. They are all corrupt and they are thieves."

The austerity measures are accompanied by steps to make it easier for businesses to hire and fire workers, including reductions to severance pay and the warning employers must give workers before they let them go.

The junior ruling Democratic Left party has refused to support these, saying they have no bearing on Greece's fiscal targets under the bailout plan. A handful of MPs from the second ruling party, Socialist PASOK, have also wavered.

But the Democratic Left has pledged to vote "present" rather than "no" to the measures, which should allow Samaras's New Democracy and the remaining PASOK MPs to win a vote expected late on Wednesday with around 154 of Parliament's 300 seats.

The small leftist party has also said it will back the 2013 budget in a vote on Sunday, a second hurdle Greece must clear to receive the aid tranche and seen as a confidence vote in the government.

The protests will put deputies under added pressure, as throngs of detractors are expected to gather on parliament's doorstep in Syntagma Square, frequently the site of violent clashes between black-hooded demonstrators and police.

Crowd numbers are seen eclipsing the 16,000 that showed up in marches on Tuesday, union leaders said, as Greeks look for a way to denounce a government they accuse of sparing the country's wealthy from feeling the pain of the crisis.

"They've taken everything we have - our money, our jobs, our lives - and they won't stop until they've finished us off to satisfy the Europeans," said Popi Alexaki, 40, a former nurse in a dentist's office who lost her job in August.

"They make me sick. Enough, enough, enough!"

(Additional reporting by Lefteris Papadimas; Writing by Michael Winfrey; Editing by Peter Graff)

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