Faced with stubborn stagflation, the Socialist government of Prime Minister Andreas Papandreou has pushed through parliament a tough bill making strikes more difficult, clearly establishing a more conservative approach on domestic policy and possibly provoking a head-on clash with the Communist Party.
The legislation was approved in the face of a wave of protest strikes and a rally staged by leftist union leaders before parliament.
Along with a wage freeze imposed in January, the new law reflects a change in direction toward economic austerity after more liberal economic policies implemented in the first year of the Papandreou government failed to solve the problem of stagflation.
The bill is seen here as the acid test for future relations between the governing Socialists and the opposition Communist Party, a dominant force in the labor unions. Communist deputies staged a dramatic walkout during Friday's vote.
The degree to which the Communists choose to challenge the new bill through strike action over the next few weeks will show what political margins Papandreou enjoys in trying to steer a more conservative course on the domestic front.
The conservative New Democracy opposition party also voted against the bill, but the party leadership has pledged to call off strike action by its affiliated unions now that the bill has gone through parliament.
Both conservatives and Communists have challenged the government to call early elections on the bill, and Papandreou last week said he was ready to go to the polls at any time.
This may prove to be only a mutual calling of political bluff. Holding elections barely halfway through the Socialists' term would require the cooperation of conservative President Constantine Karamanlis, who recently voiced opposition to such a move.
The furor over the new legislation comes as the Socialists appear poised to decide whether to sign a new agreement with the United States on the operation of the U.S. bases in Greece, prompting questions and some perplexity as to why Papandreou should have chosen to risk a confrontation with the fervently anti-American Communists at this time.
U.S. and Greek negotiators are currently engaged in marathon sessions in Athens on the future of the bases, and analysts have suggested that the bases equation may be complicated by a Socialist-Communist row over the new law.
Meanwhile, the ball is in the Communist court, although the party's final position will have to take into account that of Moscow, from which it takes its cue. The Soviets are likely to have a moderating influence as they are believed to be well pleased with Papandreou's dissident stand, particularly on issues of East-West relations and international security, in NATO and the European Community.
The government has defended the new legislation by calling attention to its first three articles, referring to the "socialization" of the public sector--the reorganization toward greater profit and efficiency of Greece's overstaffed and overdrawn public sector organizations, which include banks, telecommunications and energy services and transport.
Attention and acrimony have focused on Article 4 of the bill, which stipulates that a decision to strike by a federation of trade unions may be challenged by 10 percent of the members of a shop floor union. Such a vote renders the strike illegal until the challenge is resolved. In addition, strikes are to be decided by 51 percent of the registered members of a union rather than 51 percent of those attending the union assembly, as has been the case until now.