Greece’s governing Socialists won a key vote on labour reforms in parliament as transport unions escalated their protests on the eve of a new general strike that will ground flights, close schools and disrupt services.
Crippled by high budget deficits and a mountain of debt, Greece was saved from bankruptcy in May by a 110 billion euro international rescue loan package. In return, the government slashed pensions and salaries, hiked taxes, raised retirement ages and eased restrictions on private sector layoffs.
On Tuesday night lawmakers passed a labour reform package in a 156-130 vote, with 14 absent. But prime minister George Papandreou expelled a dissenting lawmaker from his party – the fourth member to be expelled since the Socialists came to power last year – leaving his party with a six-seat majority.
The labour reforms include fresh pay cuts, salary caps and involuntary staff transfers at state companies. They will also reduce unions’ collective bargaining powers in the private sector, where employers will be able to substantially reduce salaries.
Public transport workers, among those directly affected by the reforms, held a 24-hour strike today, leading to large traffic jams in Athens as commuters car pooled and used taxis to get to work. Disruptions will continue tomorrow when Greece’s two largest unions have called their seventh general strike of the year.
Unions and opposition parties oppose the reforms, which left-wing parties claim will take labour relations “back to the Middle Ages”.
But the Socialists cite the need to turn around loss-making public corporations while saving private sector jobs by allowing struggling businesses to cut costs.
“Right now, there is just chaos and anarchy in labour relations,” Mr Papandreou said. “There is no kind of protection.”
“We want to keep firms afloat and prevent layoffs,” he said.
Outside parliament, about 1,000 demonstrators from unions gathered in protest, demanding a more extended debate on the proposed reforms, and changes to most of the proposals.