Greek strike to test government pension reform

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By Renee Maltezou | June 29, 2010 8:47 PM EST

Greek workers stage a new 24-hour strike on Tuesday that will gauge public discontent with government austerity measures, including a radical pension reform aimed at helping the country solve its huge debt crisis.

Transport will be disrupted while public offices, local media, schools and banks will close in the fifth joint walkout by major public and private sector unions this year. Hospitals will operate with emergency staff.

Thousands of civil servants and private sector workers are expected to march in Athens at about midday (10 a.m. British time), as parliament starts to discuss the reform which raises the retirement age, cuts benefits and curtails early pensions.

"These measures won't help. They will only lead to deeper recession and poverty," said Despina Spanou, board member of public sector union ADEDY. "Workers will clearly answer the government and this reform which abolishes social security."

The government insists cuts are vital. "We deeply believe what we are doing is in the interests of the Greek people," government spokesman George Petalotis said.

Investors will be watching the size of the protest to get an indication of the opposition the ruling Socialists face as they struggle to implement austerity steps designed by the EU and the IMF in exchange for 110 billion euros (89.5 billion pounds) in loans.

Participation in recent protests has waned, partly as Athenians escape to the islands for summer holidays. But unions representing about 2.5 million workers -- half the Greek workforce -- expect big public support on Tuesday.

AUSTERITY BITES

At a peak of public protests, about 50,000 people marched in Athens on May 5. That day, three people were killed in the fire-bombing of an Athens bank. About 25,000 people turned out for the last similar strike on May 20.

A temperature of 25 Celsius (77 Fahrenheit), fairly cool for Athens in late June, was forecast for midday on Tuesday.

Many Greeks have started feeling austerity biting since the government cut civil servants' holiday bonuses in May. A new rise in VAT takes effect on July 1, to 23 percent from 21.

Most people believe the pension reform will not save the deficit-stricken pension funds and say their sacrifices are futile, an ALCO poll showed on Saturday.

The government has a majority with 157 seats in the 300-seat parliament and should be able to pass the reforms despite some opposition within the socialist party.

Repeated strikes, protests that may turn violent and a rise in small bomb attacks since riots in 2008 have hurt tourism, a key sector for Greece's 240 billion euro economy. One senior official died last week from a booby-trapped bomb.

Aegean Airlines said it had cancelled 14 domestic round trips and Olympic Air called off 34 flights to Greek islands, including Mykonos and Santorini. International flights will not be affected by the strike.

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