Greece braces for shutdown as austerity vote nears

October 18, 2011

ATHENS, Oct 18 (Reuters) - Greek ships were harboured and trains halted on Tuesday as angry workers built momentum for “the mother of all strikes” expected to bring the entire country to a halt in protest against a new package of tax hikes and wage cuts.

Unions representing around half of Greece’s 4 million-strong workforce have called a 48 hour general strike for Wednesday and Thursday to protest against a sweeping package of austerity measures due to be passed in parliament this week.

A wave of individual strikes over recent days by groups ranging from garbage collectors to tax officials, journalists and seamen has given a foretaste of this week’s protest which will culminate in mass demonstrations in front of parliament.

The protest, dubbed “the mother of all strikes” by the daily Ta Nea newspaper, is expected to be the biggest since the financial crisis began two years ago, shutting state offices, shops and even providers of everyday staples like bakers.

Prime Minister George Papandreou, battling to satisfy demands from international lenders for tough action, has appealed for unity, saying the package must pass to allow Greece to emerge from the crisis.

“The nation is at a crucial moment and we have to be united. In this battle, we need everyone,” Papandreou told a cabinet meeting late on Monday. “Everyone must assume their responsibilities.”

“Our main goal is to end the uncertainty over the country’s future. Because this uncertainty undermines our efforts and sacrifices,” he said.

Late on Monday, the government suffered a symbolic blow when PASOK lawmaker Thomas Robopoulos resigned in protest, although parliamentary rules allow him to be replaced by another member of the ruling party, leaving its 4-seat majority intact.

Two other PASOK deputies have also threatened to vote against part of the package but, with one of the smaller opposition parties possibly offering support, the package is still expected to pass.

RECESSION

The bill due to be passed on Wednesday or Thursday includes tax hikes, wage cuts, public sector layoffs and changes to collective bargaining rules. It follows a series of painful austerity measures that have already roused bitter resentment.

Trapped in deep recession for the past three years, Greece is still choking on a public debt that amounts to around 162 percent of gross domestic product, despite repeated doses of austerity which risk crushing any growth prospects.

The economy is forecast to contract 5.5 percent in 2011 and 2.5 percent next year.

However European partners and the International Monetary Fund, which have been providing the funds needed to keep Athens afloat have pressed for more action, complaining that Greece has been falling behind its budget targets.

Parliament is due to open a three-day debate later on Tuesday, after Papandreou meets members of the ruling PASOK parliamentary group to rally support.

He wants a convincing show of support for the measures in time for an EU summit on Oct. 23, when a new bailout deal is expected to be outlined. He is due to meet conservative opposition leader Antonis Samaras in a bid to present a united front in Brussels.

Government officials have dismissed rumours that Papandreou might renew an offer for a coalition government, which Samaras turned down in the summer. (Additional reporting by Angeliki Koutantou and Tatiana Fragou; Writing By James Mackenzie; Editing by Peter Graff)

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