Greek protesters to surround parliament to stop cuts debate

Reuters News
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Posted: Jun 14, 2011 12:09 PM
Greek protesters to surround parliament to stop cuts debate

By Lefteris Papadimas and Harry Papachristou

ATHENS (Reuters) - Greek protesters vowed on Tuesday to surround parliament to prevent deputies from debating new austerity measures on June 15, and unions said they would bring the country to a halt in a national strike.

Pressure is growing on Prime Minister George Papandreou, who is trying to muster support for a five-year plan that international lenders say is crucial for them to approve a second aid deal for Athens, enabling it to avoid a default.

Papandreou's PASOK party, which holds 156 seats in the 300-seat parliament, will present the plan including tax hikes and spending cuts this year for discussion on Wednesday and is expected to pass it later this month.

But indicating the deepening opposition, one ruling party lawmaker said on Tuesday he would oppose it.

Protesters, who have staged demonstrations every day for three weeks in Athens' Syntagma square in front of parliament, said they would make a cordon around the building on Wednesday.

"Now that the government is putting the medium term austerity program to vote, we (will) encircle the parliament, we (will) gather and we (will) stay at Syntagma," the self-styled People's Assembly of Syntagma Square said in a statement.

"Our first stop is the general strike of June 15th. We won't stop until they withdraw it."

Public sector union ADEDY, representing half a million workers, said it would march on parliament and join non-union demonstrators in a peaceful protest. No trains will run, ports will halt operations and hospitals will be reduced to minimal staffing, although flights will not be disrupted.

Greek police will deploy about 1,500 staff throughout Athens to maintain order, as opposed to about 300 each day so far during the protests, a police official said.

In May 2010, three people were killed when a bank was set on fire amid demonstrations and a 48-hour nationwide strike.

PRESSURE, DISCONTENT

On Monday, ratings agency Standard & Poor's made Greece the lowest-ranked country it covers and said it looked increasingly likely that Athens would restructure its 340 billion euro debt load, a move it would see as a default.

Benchmark Greek bond yields hit a record high on Tuesday and Athens' short-term borrowing costs climbed at an auction of six-month T-bills as buyers demand bigger returns to hold its government debt.

Greece is having little success in reining in spending. The central government deficit widened by 13 percent on year in the first five months of 2011, missing an interim target, Finance Ministry data showed on Tuesday.

Euro zone finance ministers met on Tuesday to discuss the new bailout ahead of a self-imposed June 20 deadline for a deal.

But EU leaders and the European Central Bank have been split over whether private bondholders should share the burden of a fresh bailout plan.

The EU and IMF want all Greek parties to agree on the fresh austerity measures ahead of a June 20 EU finance ministers meeting and a June 23-24 EU summit when leaders discuss the new bailout worth 120 billion euros to replace last year's deal.

That discussion and passage of Athens' new austerity plan are central to the release of a 12 billion euro tranche that Greece needs to roll over its debt.

But the conservative opposition party New Democracy has refused to back the plan. Complicating matters, Papandreou's PASOK party has fallen behind in opinion polls.

PASOK deputies plan to meet at 1130 GMT on Wednesday in parliament to discuss the measures.

Austerity measures have already hammered the economy, and a 5.5 percent contraction in first quarter gross domestic product and unemployment above 16 percent have added to discontent.

The Greek commerce umbrella association representing small businesses said on Tuesday it would protest against the new tax hikes with its members shutting their shops for three hours.

"The answer to the country's big problem, recession, cannot be other than a restart of economic activity and investment in the small business sector, which is the spine of employment," GSEE and ESEE said in a statement.

(Additional reporting by Renee Maltezou and George Georgiopoulos; Writing by Michael Winfrey and Hugh Lawson)