Greek unions start 3 days of anti-austerity action
ATHENS, Greece (AP) — Greece's coalition government faces a crucial test in Parliament as unions on Monday launched three days of escalating strikes against austerity proposals that must win lawmakers' support if the debt-crippled country is to get more aid and stave off bankruptcy.
The conservative-led coalition that has governed Greece since June will later Monday present the country's fourth austerity package in more than two years to Parliament. The drastic spending cuts and tax hikes demanded by the country's bailout creditors aim to save some €13.5 billion ($17.3 billion) in 2013-14. If lawmakers reject them in a vote Wednesday, Greece faces the prospect of losing vital rescue loans that have kept it afloat since May 2010.
The next loan installment of €31.5 billion out of a total of €240 billion is already overdue and without it, Prime Minister Antonis Samaras has said Greece will run out of euros on Nov. 16. If the country cannot raise any more funds from elsewhere, it would quickly find it impossible to pay its debts. The government would then be forced into issuing its old currency, the drachma, to pay bills and wages. As well as pushing the country out of the eurozone, this could trigger a nightmare of bank runs, hyperinflation and currency depreciation that would vaporize savings and put even the most basic goods out of the reach of many Greeks.
If the country was forced into a default and began printing its own currency, the entire eurozone's finances would become increasingly shaky as markets would assume other countries in the eurozone might be the next to go. Investors would begin to pull their money out of the region or demand higher returns to keep it there.
Samaras warned conservative lawmakers on Sunday about the risks the country faces if the measures — which include a two-year increase in the retirement age to 67, salary and pension cuts and another round of tax increases, including raising taxes for the interest on bank deposits from 10 to 15 percent — are not passed through Parliament.
"The problem is not whether this measure or the other is adopted, ... (but) what would happen if the measures did not pass, if the agreement were not finalized," he said, repeating pledges that the cuts will be the last of their kind.
While Samaras admitted that Greeks have already lost some 35 percent of their income in two years thanks to previous austerity measures, he added that "we would lose at least twice that amount within a few weeks — about 80 percent of our standard of living" if the country was forced out of the euro.
For more than four months, Samaras has been fighting a battle on two fronts: To persuade debt inspectors from the European Union, International Monetary Fund and European Central Bank to approve the country's €31.5 billion loan installment, and to talk his two center-left coalition partners into backing the necessary spending cuts and labor reforms.
Persuading politicians has proved the hardest of the two tasks. The main Socialist partner in the coalition has agreed to the package, but faces increasing dissent from its own lawmakers, a handful of who have said they won't vote for the cutbacks come Wednesday. Meanwhile, the smaller Democratic Left party, while accepting the bulk of the belt-tightening, has dug in its heels over new labor reforms.
The coalition government has the support of 175 lawmakers in the 300-member parliament — 127 from conservative New Democracy, 32 from Socialists and 16 from the Democratic Left.
The austerity package only needs a simple majority to pass and the Democratic Left's opposition to the bill should not threaten its passage. But approval with fewer than 151 votes would reinforce opposition politicians' argument that Samaras lacks legitimacy.
Main opposition leader Alexis Tsipras has already called for a fresh round of elections — although the country has already had two popular votes and four governments in the past year. His Radical Left Coalition party is leading opinion polls, which have also seen a rapid rise in popularity for the militant far-right Golden Dawn party, which has been linked to violent attacks on immigrants and homosexuals.
While Samaras has been facing increasing pressure at home, the other members of the 17-country eurozone have been doing what they can to ensure Greece stays in the currency group. Germany's Chancellor Angela Merkel, for example, has softened her previous tough stance toward Greece — paving the way for a deal to let Greece take more time to meet loan conditions, including painful budget cuts.
After nearly three years of repeated income cuts and tax hikes, Greeks have little stomach for more. On Monday, doctors launched a three-day strike that will leave state hospitals functioning on emergency staff, while taxi-drivers started rolling 24-hour strikes. There were no news broadcasts and newspapers will not be published Tuesday due to a journalists' strike, while Athens urban rail and tram drivers walked off the job.
During the general strike Tuesday and Wednesday, schools, tax offices and public administration will shut down, while there will be no train or ferry services across the country. Flights will be disrupted for three hours Tuesday.
On Sunday night, Parliament will vote on the 2013 state budget, which provides for a sixth year of recession in which the national debt will rise to 189.1 percent of the country's gross domestic product of €194 billion. All three coalition partners are expected to back the budget.