Municipality workers shout slogans during a protest on the first day of the 48-hour nationwide general strike, in Athens, on Tuesday.(Photo: Thanassis Stavrakis, AP)
ATHENS, Greece -- Greece's fragile coalition government faces its
toughest test when lawmakers vote on new painful austerity measures
demanded to keep the country afloat, on the second day of a nationwide
The $17.3 billion package is expected to scrape
through Parliament, following a one-day debate. But any defections or
abstentions could severely weaken the conservative-led coalition formed
The Greek Parliament has to approve the package of
spending cuts and tax increases agreed with the country's international
creditors so that it can continue receiving vital bailout loans. The
next loan installment is already overdue and without it, Prime Minister
Antonis Samaras has said Greece will run out of euros on Nov. 16.
the country cannot raise any more funds from elsewhere, it would
quickly find it impossible to pay its debts. The government would then
be forced into issuing its old currency, the drachma, to pay bills and
wages. As well as pushing the country out of the 17-country group that
uses the euro, 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 country was forced into a default and began printing its own
currency, the entire eurozone's finances would become increasingly shaky
as markets would assume other countries in the eurozone might be the
next to go. Investors would begin to pull their money out of the region
or demand higher returns to keep it there.
"We must vote in favor
of the measures," conservative New Democracy lawmaker Constantinos
Tassoulas urged Parliament at the start of Wednesday's stormy debate.
"It is our duty."
The measures being debated include new deep
pension cuts and tax hikes, a two-year increase in the retirement age to
67, and laws that will make it easier to fire and transfer civil
servants. The country is suffering a deep recession set to enter a sixth
year, and record high unemployment of 25 percent.
parties accused the government of trampling on Greece's constitution
with the proposed cuts in pensions and benefits, and complained that the
several hundred pages-long bill was too complex to be debated in a
"This is blackmail," main opposition Radical Left Coalition MP Zoi Constantopoulou said.
small Democratic Left coalition partner has said it will not back the
measures, while a handful of lawmakers from the third coalition party,
the Socialists, are expected to vote against the austerity package.
government combined has 176 of Parliament's 300 seats, and needs a
simple majority of those present to pass the bill. Without the
Democratic Left, Samaras' conservatives and the Socialists control 160
votes. However there is still a threat of more dissenters.
Samaras has been facing increasing pressure at home, the other members
of the 17-country eurozone have been doing what they can to ensure
Greece stays in the currency group. Germany's Chancellor Angela Merkel,
for example, has softened her previous tough stance toward Greece -
paving the way for a deal to let Greece take more time to meet loan
conditions, including painful budget cuts.
Even if Parliament
approves the draft legislation, it is not clear whether Greece will
receive the next bailout installment in time for Samaras' Nov. 16
deadline. The payment was expected to be approved at a meeting of
European finance ministers on Monday Nov. 12. However the ministers'
vote hinges on a report by the so-called troika of austerity inspectors
from the European Union, IMF and European Central bank - which may not
be ready in time. In this case, the EU or ECB may have to step in with
some interim financing.
The vote in the Athens comes on the second
day of a 48-hour general strike which has shut down the public
administration, left hospitals functioning on emergency staff and closed
schools and tax offices. All ferry and train schedules have been
cancelled until Thursday, flights will be disrupted by a four-hour air
traffic controllers' strike and Athens will be without public transport
for most of the day.
Two separate anti-austerity demonstrations
are expected to converge on Parliament in the afternoon, at the height
of the debate on the new cutbacks. On Tuesday, more than 35,000 people
marched through central Athens to express their anger at the new