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Europe

Protesters to besiege 'austerity plan' parliament

Text by NEWS WIRES

Latest update : 2011-06-15

Greek unions prepared to stage a general strike and protesters vowed to surround parliament to prevent a debate on deeply unpopular austerity measures on Wednesday as two ruling party lawmakers said they would vote against the government.

REUTERS - Protesters said they would surround the Greek parliament on Wednesday to prevent debate, putting new pressure on the government to drop its austerity plan, and two ruling party lawmakers said they would vote against the measures.

Prime Minister George Papandreou is struggling to muster support for a five-year plan that international lenders say must be passed if they are to approve a second aid deal and give Athens the next tranche of funding in early July, enabling it to avoid default.

The government will present the plan, which includes tax rises and spending cuts this year, for discussion on Wednesday and wants to pass it later this month.

But one lawmaker in the ruling party, which holds 156 seats in the 300-seat parliament, said on Tuesday he would vote against the plan, and another said he was leaving the parliamentary party group to oppose the measures.

“I don’t believe in our economic policy any more. We have failed, and since then we have been forced to hide the truth from the people... We are in a vicious cycle,” George Lianis wrote in a letter to parliament’s speaker announcing his departure from the parliamentary group.

Protesters, who have staged demonstrations in Syntagma Square in front of parliament every day for three weeks, said they would form a cordon round the building on Wednesday.

“...we (will) encircle the parliament ... and 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 15. We won’t stop until they withdraw it (the plan).”

The 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, but flights will not be disrupted.

Greek police will deploy about 1,500 officers throughout Athens to maintain order, compared with 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 during 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 -- an action 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 year 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 before a June 20 EU finance ministers meeting and a June 23-24 EU summit at which leaders will 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.

The conservative opposition party New Democracy has refused to back the plan and, 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 umbrella association representing Greece’s small businesses said on Tuesday its members would shut their shops for three hours in protest against the new tax rises.

“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,” the GSEE and ESEE said in a statement.
 

Date created : 2011-06-14

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