ATHENS (Reuters) - Greece’s government will present a new austerity package to parliament on Monday, facing a week of strikes and protests over proposals which must win deputies’ approval if the country is to secure more aid and stave off bankruptcy.
Parliament is expected to vote on Prime Minister Antonis Samaras’ package of 13.5 billion euros (10.6 billion pounds) in cost cuts and tax hikes on Wednesday along with measures making it easier for firms to hire and fire workers.
Despite public exasperation at four years of belt-tightening that has helped wipe out a fifth of the economy and leave a quarter of Greeks jobless, the package and a tough budget slated for a vote on Sunday are expected to scrape through parliament.
Greece’s powerful main public and private sector unions will launch a 48 hour strike against the legislation on Tuesday and plan marches in Athens’ city centre. Journalists, doctors, transport workers and shopkeepers are also planning stoppages.
Approval of the reforms and the passage of the 2013 budget are crucial to unlocking 31.5 billion euros in aid from an International Monetary Fund and European Union bailout that has been on hold since May.
“These will be the last cuts in wages and pensions,” Samaras said on Sunday in a speech aimed at galvanizing the members of his New Democracy party.
“We promised to avert the country’s exit from the euro and this is what we are doing. We have given absolute priority to this because if we do not achieve this everything else will be meaningless.”
Union leaders say the measures will simply deepen a recession that is expected to run into next year.
“Our labour action next week will be part of efforts to avert policies that will sink the country deeper into recession and destroy the fabric of society,” Yannis Panagopoulos, head of GSEE private sector umbrella union, told Reuters.
The protests will ratchet up pressure on coalition deputies whose parties have slid in opinion polls since a June election in the Mediterranean country of 10 million.
On Friday, a poll showed New Democracy’s support had fallen to 22 percent, from 30 percent in the election. Its Socialist PASOK partners had fallen to 7 percent, down from 12.3 percent according to the PULSE survey.
“I want this government out. They should go to hell,” said Vassiliki Trimopoulou, a 60-year-old woman who has just retired under a state redundancy plan. “This is certainly not the last package. But I hope this will be the last thing they decide on.”
The smallest coalition member, the Democratic Left, has pledged to oppose the plans to cut wages, reduce severance payments and scrap automatic wage hikes, saying they will devastate workers who have borne the brunt of the crisis.
PASOK is struggling to shore up support for the measures after one of its deputies quit on Thursday in the wake of a narrow victory in pushing through a privatisation bill also demanded by the lenders, cutting PASOK’s numbers to 32 MPs.
Five of those have said they may oppose the reforms. But even without them, New Democracy and PASOK’s remaining members are expected to muster at least 154 of Parliament’s 300 votes.
“We will not step back now that we are in the final phase,” PASOK leader Evangelos Venizelos told journalists on Sunday.
The “troika” of the IMF, European Commission and European Central Bank have agreed to extend a deadline for Greece to achieve a primary budget surplus of 4.5 percent, a measure of public finances minus debt maintenance costs.
That should give the battered economy breathing room, but on Wednesday, the government said it would shrink more than forecast in 2013 and debt would peak at 192 percent of GDP in 2014, 10 percentage points higher than earlier forecast.
That has increased the prospect of another round of debt restructuring, a source of conflict between the IMF and Greece’s biggest EU creditor Germany who both privately say Athens’ debt trajectory is unsustainable.
Additional reporting by Renee Maltezou; editing by Philippa Fletcher