Greece faces general strike, more cuts planned

By Derek Gatopoulos

Associated Press

Published: Monday, June 27 2011 2:55 p.m. MDT

Tourists stand behind a barrier flanked by Greek presidential guards at the tomb of the Unknown Soldier in front of Parliament as a woman passes by in central Athens, Monday, June 27, 2011. Greece's Finance Minister says the country wants to conclude negotiations for a second bailout by the end of the summer "at the latest." Evangelos Venizelos said the next euro 12 billion rescue loan payout due next month will cover state expenses through mid-September, and he called on the opposition to side with the government in negotiations with the country's international creditors.

Petros Karadjias, Associated Press

ATHENS, Greece — Greece's beleaguered government is bracing for a 48-hour general strike as lawmakers debate a new round of austerity reforms designed to win the country additional rescue loans needed avoid bankruptcy.

More than 5,000 police are to guard Athens' city center Tuesday, with union protest rallies due to start at 10:00 a.m. (0700 GMT) and head to Parliament.

The strike is set to disrupt or halt most public services, with doctors, ambulance drivers, journalists and even actors at a state-funded theater joining the protest, which is to continue Wednesday.

Flights will be grounded both days during stoppages by air traffic controllers between 8:00 a.m. and midday and between 6:00 p.m. and 10:00 p.m. (0500-0900 GMT and 1500-1900 GMT).

Unions are angry at a new €28 billion ($40 billion) austerity program that would slap taxes on minimum wage earners and other struggling Greeks, following months of other cuts that have seen unemployment surge to more than 16 percent.

The package and implementation law must be passed in parliamentary votes this week so the European Union and the International Monetary Fund release the next installment of Greece's €110 billion ($156 billion) bailout loan. Without it, Greece faces the prospect next month of becoming the first eurozone country to default on its debts — a potentially disastrous event that could drag down European banks and affect other financially troubled European countries.

"These measures are a massacre for workers' rights. It will truly be hell for the working man. The strike must bring everything to a standstill," said Thanassis Pafilis, a lawmaker with the Greek Communist Party that will lead one of Tuesday's main rallies.

A three-day debate on the new austerity measures got under way in parliament Monday, with Socialist Prime Minister George Papandreou buoyed by a word that French banks are willing to defer Greek debt claims and ease pressure on Athens.

"I call on you to vote for survival, growth, justice, and a future for the citizens of this country," Papandreou told lawmakers.

Greece remains frozen out of bond markets and is surviving on the €110 billion in promised bailout loans. Rescue creditors have set parliamentary approval of the tough new Greek measures as a strict condition for further assistance to cover a 2012 financing gap.

Papandreou said he hoped the terms of a second bailout would be better than the first, which was agreed last year.

"I call on Europe, for its part, to give Greece the time and the terms it needs to really pay off its debt, without strangling growth, and without strangling its citizens," he said.

Papandreou's new finance minister, Evangelos Venizelos, said the government acknowledged the new cuts were "unfair." He said Greece wants to conclude negotiations for a second bailout by the end of the summer "at the latest," and he urged opposition parties to abandon their opposition to the austerity program.

"These measures will take us from running budget deficits to achieving primary surpluses. It's a difficult but necessary step," Venizelos said.

The Socialists, with traditionally strong ties to the striking unions, have struggled to contain a party revolt against austerity.

Papandreou has a majority of five seats in parliament, but at least one Socialist lawmaker has said he will vote against the government on Wednesday, with another dissenter undecided — prompting dire warnings from senior government officials.

Theodoros Pangalos, the outspoken deputy prime minister, criticized financial experts who have suggested Greece might be forced to abandon the euro and return to its old currency, the drachma.

"People who say this are extremely stupid, whether they are analysts, university professors or economists," Pangalos said in a weekend interview with the Spanish daily El Mundo.

"A return to the drachma would mean that the next day banks would be surrounded by people trying to get their money out. The army would have to use tanks to protect (the banks) because there wouldn't be enough police to do it," he was quoted as saying.

"There would be riots everywhere, shops would have empty shelves and people would be jumping out of windows ... It would also be disastrous for the entire economy of Europe."

Elena Becatoros in Athens contributed to this report.

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