New strike cuts Greece

Hundreds of thousands of Greeks yesterday embarked on a 48-hour strike to protest against a new round of wage and pension cuts that parliament is expected to approve by a narrow margin.

The parliamentary vote tomorrow is the biggest test yet for the government of Prime Minister Antonis Samaras, which needs victory to secure aid from foreign lenders, but has failed to convince its smallest coalition partner and the public to back the reforms.

The strike, called by Greece's two biggest labour unions representing half of the four million-strong workforce, brought public transport to a virtual standstill and shut schools, banks and local government offices.

About 16000 protesters gathered outside parliament in Athens, waving flags, beating drums and chanting, "People, don't bow your heads", and "This strike is only the beginning".

It was the third major walkout in two months against the package of public spending cuts and reforms making it easier to hire and fire workers, which many Greeks feel penalise the poor and spare a wealthy elite.

A succession of strikes since Greece fell into a crisis in 2009 have so far failed to prevent parliament from approving the international lender-prescribed cuts.

The government has implored Greeks to endure the cuts to avoid national bankruptcy, adding that this will be the last round of pain. But they responded with a mix of resignation and anger.

Parliamentary approval for the package - which includes cutting pensions by as much as a quarter and scrapping holiday bonuses - is needed to ensure Greece's EU and IMF lenders release more than à31-billion of aid, much of it aimed at shoring up banks.

With 16 deputies from the small Democratic Left planning to vote against reforms and a non-committal response from at least five Socialist lawmakers, Samaras can count on the support of only about 154 lawmakers in the 300-seat parliament.

Any further defections from the socialist Pasok party could put the government at risk of falling below the 151 votes needed to pass the measures, ushering in political chaos that would once again raise fears of a Greek eurozone exit.

Exasperated by years of broken promises to reform, Greece's lenders have warned Athens that it cannot afford to fail again.

"Our Greek friends have no options or choice. They have to do it," said Jean-Claude Juncker, the head of the Eurogroup of eurozone finance ministers.

Greece's economy has shrunk by a fifth since the debt crisis exploded. Public debt is seen at 189% of GDP next year and Athens is expected to be widely off track from targets under its latest bailout agreed with the IMF, European Commission and European Central Bank.