ATHENS, Greece – Greece entered a week of turmoil Monday, as the country suffered the first of three days of escalating anti-austerity strikes and its politicians prepared to vote on whether to accept further harsh austerity measures or set the debt-crippled country on its way out of the euro.
State hospital doctors, taxi drivers, Athens transport workers and journalists walked off the job Monday, ahead of a two-day general strike Tuesday and Wednesday that will shut down all public services and most forms of transport.
Later Monday, the conservative-led coalition that has governed Greece since June will present the country’s fourth austerity package in more than two years to an angry 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 Greece could go bankrupt in less than two weeks. The country would then be forced out of the group of 17 countries that use the euro and into issuing its old currency, the drachma, to pay bills and wages. 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.
“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,” Prime Minister Antonis Samaras told conservative lawmakers on Sunday.
While he repeated pledges that the cuts will be the last of their kind, Samaras conceded that Greeks have already lost some 35 per cent of their income in two years.
“But if we were forced to leave the euro now, we would lose at least twice that amount within a few weeks — about 80 per cent of our standard of living,” he said.
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 centre-left coalition partners into backing the necessary spending cuts and 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 labour reforms.
The rest of the austerity package includes a two-year increase in the retirement age, from the current average of 65, salary and pension cuts and another round of tax increases, including raising taxes for the interest on bank deposits from 10 to 15 per cent.
The coalition government has 175 MPs in the 300-member parliament, 127 from conservative New Democracy, 32 from Socialists and 16 from the Democratic Left. Four MPs of the three parties have recently declared themselves independent.
The bills only need 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 on Sunday 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.
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 per cent of the country’s gross domestic product of €194 billion. All three coalition partners are expected to back the budget.
