Dissent, strikes ahead for Greece on crisis reform road

by John Hadoulis – Sun Jun 26, 3:37 pm ET

AFP/File – Greek 'Indignants' protest in front of the Greek parliament in the central Syntagma square

ATHENS (AFP) – Greece faces a strike this week and a momentous battle in parliament as the government struggles to quash dissent to additional austerity reforms needed to secure a vital new EU-IMF bailout.

The country's influential unions have called a 48-hour walkout from Tuesday on top of rolling power cuts by disgruntled electricity workers that have hit households around the country for the past week.

The labour unrest, accompanied by large protests outside parliament that have occasionally turned violent, is fuelled by government plans to sell 50 billion euros ($71 billion) worth of state assets to reduce the country's crushing debt.

Greece has been told by its European peers that it cannot hope to continue receiving aid out of a 110-billion-euro rescue package agreed with the EU and the IMF last year without these reforms and privatisations.

The Socialist government of Prime Minister George Papandreou has until Thursday to push austerity reforms worth an additional 28 billion euros through a divided parliament -- on top of sweeping cuts last year.

"We are totally confident," government spokesman Ilias Mosialos told AFP on Saturday. "These are extremely crucial votes. We believe lawmakers in parliament's majority will act responsibly."

But Papandreou's political opponents have pledged to oppose the plan and even some of his own lawmakers are grumbling about measures likely to alienate constituents.

"I insist that I will not approve this plan," said one Socialist lawmaker, Alexandros Athanasiadis, who opposes the sale of a 17-percent stake in the near-monopoly Public Power Company.

Another deputy has criticised the government's deference to the so-called "troika" of creditors -- the EU, IMF and the European Central Bank.

"Last week we managed to soften some of the edges of the plan, then the troika told the government to take the changes back," said Socialist lawmaker Thomas Robopoulos.

"This means we have no role to play in parliament," he said.

Papandreou has a five-seat majority in the chamber and a state treasury that is about to run out of cash by mid-July unless the international creditors agree to unlock a scheduled 12-billion-euro tranche of the EU-IMF bailout.

They have refused to release the loan without without a clear reform commitment from Athens. The IMF has even threatened to pull out of the deal without pledges from Europe that the Greek problem will be addressed once and for all.

To help Papandreou prevail at home, Brussels this week offered the hope of extra funds from regional cohesion funds to boost development and create jobs.

Amid a deep recession exacerbated by the cuts, Greek unemployment has climbed to record levels (15.9 per cent of the workforce in the first quarter of 2011) and more than 800,000 people are officially out of work.

The parliament vote is also linked to a new bailout that could reach 100 billion euros, though part of that will likely be on the tail-end of the existing 110-billion-euro EU-IMF package.

The second bailout of Athens in just over a year would combine fresh eurozone loans and privatisation proceeds with a contribution from banks and other private investors who are being pressed to lend the Greeks more money in the form of a rollover of Greek bonds due for redemption over the coming months.

World markets are following the drama closely for fear that a wrong step now could cause far-reaching damage throughout the eurozone.

EU leaders on Thursday called on "all political parties in Greece to support the programme's main objectives," saying "national unity is a prerequisite for success."

But the country's number two party, the opposition conservatives, intends to oppose the plan.

"We disagree with the policy mix which has already led to a deep and protracted recession," party leader Antonis Samaras said after talks with fellow conservative leaders in Brussels.

"Our responsibility lies not in accepting the mistake but in correcting it.

"I held my position to the end," Samaras said, amid reports that he received a dressing-down for his refusal to back the five-year programme of spending cuts and tax rises worth more than 28 billion euros by 2015.

Finance ministers from the 17-nation eurozone meet again on July 3 -- days ahead of a deadline for Greece to repay maturing debt or face default.

Dissent, strikes ahead for Greece on crisis reform road - Yahoo! News