Strike-hit Greece heads to standstill ahead of crucial vote

Sun Oct 16, 2011 7:13pm EDT
 

By Angeliki Koutantou

ATHENS (Reuters) - 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 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 Wednesday and Thursday.

With European Union leaders racing to prepare a comprehensive new bailout deal in time for a meeting on October 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 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.   Continued...

 
<p>A man shouts slogans during a rally of the "Indignant" group in front of the parliament in Athens October 15, 2011. REUTERS/Yiorgos karahalis</p>