Greek Prime Minister Antonis Samaras faces a test of his fragile coalition government today as he seeks parliamentary approval of austerity measures to unlock bailout funds amid the third general strike in six weeks.
The bill on pension, wage and benefit cuts was brought to the 300-seat Parliament today with a roll-call vote expected to be held late in the evening. Approval of the legislation is the first of the votes required by Nov. 12 to get a 31 billion-euro ($40 billion) aid tranche.
“We now find ourselves at the final critical crossroads and must take the right decision,” Finance Minister Yannis Stournaras told the committee yesterday. “The goal is clear and there is only one road toward it.”
Samaras must stem defections from his three-party coalition to convince European Union leaders including German Chancellor Angela Merkel that his government is serious about staying in the euro. On paper, he can count on the backing of 175 lawmakers. Democratic Left, a coalition partner with 16 seats, has said it won’t vote for changes to labor laws it says have no fiscal benefit.
The government has lost as many as four supporters since being formed in June, with the latest defection coming from the ranks of Socialist Pasok, which provides Samaras with the votes he needs for his majority in Parliament.
The Greek 10-year bond yield fell 32 basis points to 16.9 percent at 1:58 p.m. Athens time after dropping 97 basis points over the previous two days. The country’s benchmark ASE Index rose 0.4 percent to 836.01.
Discussion of the actual bill was delayed nearly four hours as lawmakers quarrelled over procedural issues and the opposition demanded a roll-call vote on a motion to dismiss the measures because they contravene the constitution. That motion was dismissed by 170 votes to 47.
The debate was held against a backdrop of a country in a second day of a 48-hour general strike. Hospitals, banks, pharmacies and government services shut down and taxis, buses and rail services ground to a halt. A protest rally is planned outside the Parliament at 5 p.m, the second in as many days. More than 35,000 Greeks marched peacefully in central Athens yesterday.
The 238 pages of proposals in the bill range from raising the retirement age two years to 67 to eliminating Christmas and holiday payments for pensioners and cutting benefits paid to disabled people.
Public Power Corp SA (PPC) workers, opposed to caps on wages for employees in state-owned companies, are holding rolling 48-hour strikes. Five power plants were taken offline yesterday, while the islands of Crete and Rhodes suffered outages late yesterday.
“This parliament is not what will judge you,” Zoe Constantopoulou, a lawmaker with opposition party Syriza, said in the chamber today. “History will judge you.”
Parliament will convene again on Nov. 11 to vote on the 2013 budget, which provides for 9 billion euros of the savings to bring the deficit to 5.2 percent of GDP next year from 6.6 percent this year. Greece sees the economy shrinking 4.5 percent in 2013, the sixth straight contraction. The European Commission today forecast the downturn next year will be 4.2 percent.
Greece has received 240 billion euros in aid pledges from the EU and the International Monetary Fund since 2010. Under pressure to make more efforts to rein in its budget deficit and deregulate the economy, the country is still struggling to hit its debt-reduction targets, which may endanger further payments under the loan agreements.
Debt is forecast by the Greek government to rise to 189 percent of gross domestic product next year from 176 percent this year as the economy tumbles.
European Union Economic and Monetary Affairs Commissioner Olli Rehn, speaking at a meeting of Group of 20 finance chiefs in Mexico City, said Nov. 5 that a deal to unlock bailout funds must be made at a meeting of EU finance ministers in Brussels on Nov. 12. A European G-20 official, speaking before Rehn and on condition of anonymity, cast doubt on the prospects for that deadline, saying officials may fall short.
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