ATHENS, Greece – Greece's prime minister embarked on a drive Monday to push new austerity plans through Parliament, despite increasing dissent within his party and big demonstrations in the country's two largest cities.
The austerity plans — remedial measures this year and a package through 2015 — are required if Greece is to carry on getting money from last year's euro110 billion package of rescue loans from the International Monetary Fund and other countries that use the euro. Greece looks like it will need more money to cover a funding gap next year and prevent the country from defaulting on its debts.
George Papandreou's talks with his ministers at an informal Cabinet meeting Monday afternoon were the first of a series of meetings. On Tuesday, he is to present the plans to deputies from his governing Socialist party before the Cabinet reconvenes Wednesday to decide on sending the measures to Parliament.
Last week, debt monitors from the EU and IMF said Greece should receive the next euro12 billion installment of the bailout in early July — as long as additional austerity and privatization measures are deemed sufficient. A final decision is to be taken by the IMF board and the eurogroup in meetings later this month.
But the extra austerity — which includes euro6.4 billion worth of remedial measures for this year and a midterm program that will run from 2012-2015, two years beyond the current government's mandate — has disgruntled even members of the governing PASOK party, which only has a majority of six in the 300 member Parliament.
Last week, 16 PASOK deputies signed a letter demanding an extensive debate on the measures before they are ratified, while one of the signatories threatened not to vote for the reforms otherwise.
"If the draft legislation is brought to Parliament without prior discussion, I will not vote for it," Thomas Robopoulos told state TV on Friday.
The measures will include tax increases, spending cuts and trimming the size of the bloated public sector. The government is also pushing through an ambitious euro50 billion privatization program.
As part of the privatization drive, Deutsche Telekom said it was buying 10 percent of Hellenic Telecommunications Organization SA, known as OTE, raising Telekom's stake to 40 percent. The government had sold an initial stake in its telecoms company to the German enterprise in 2008, and is now exercising an option to sell 10 percent more.
Deutsche Telekom says the deal would be worth around euro400 million ($584 million) at today's stock price although the final price will be fixed later. It leaves the Greek government with a 10 percent stake in OTE.
OTE workers' unions have already voiced their objections, and are to join a public utilities strike on Thursday.
The ever increasing cutbacks have also led to a public backlash, with tens of thousands of Greeks flooding into the main squares of cities across the country in a protest fueled by appeals on social media and now in its second week.
Sunday, the 12th straight day of protests modeled on similar demonstrations held in Spain last month, saw the largest gatherings so far. More than 60,000 people jammed the capital's main Syntagma Square, according to police estimates, although protesters claimed the numbers were much higher. Another estimated 20,000 people rallied in the second largest city of Thessaloniki in the north.
With no particular political affiliation, the rallies have been a break from the traditional form of demonstrations in Greece, which are usually organized by trade unions or political parties and often turn violent. So far, there has been no violence in the rallies in Athens, although there was a minor scuffle in Thessaloniki.
Protesters were gathering in Syntagma Square again Monday evening, while striking Metro workers who had walked off the job earlier in the day had trains running again by 4 p.m. (1300GMT) so protesters could get to rally.