Lawmakers in Greece started a four-day debate Monday on whether to approve a new package of spending cuts that will extend the number of years Greeks have lived under austerity to more than a decade.
Amid confirmation that the country's battered economy is in recession again, unions have launched a wave of protests ahead of a general strike on Wednesday.
The latest round of austerity measures, which form part of an agreement between the Greek government and international bailout lenders, will involve additional pension cuts in 2019 and higher income tax in 2020. Without the new measures, Greece would face the prospect of not getting the rescue money it needs to avoid potential bankruptcy this summer when it faces a big debt-repayment spike.
Greece is currently in the midst of its third bailout program — the current three-year program expires in the summer of 2018 and could be worth up to 86 billion euros ($95 billion) in total. In return for the money, the government promised to enact a series of austerity measures as well as economic reforms — its progress is continually monitored by institutions from the European Union and the International Monetary Fund.
While the austerity measures has seen Greece's public finances improve, the draconian spending cuts have seen poverty rates surge to more than 35 percent, high in relation to the EU average under 24 percent.
Delays in negotiations between Prime Minister Alexis' Tsipras left-wing government and lenders have held up hopes of a return to growth. Official figures Monday from the National Statistical Authority showed the Greek economy shrinking for the second straight quarter during the first three months of the year — two consecutive quarterly declines is the traditional measure of recession. Greece's GDP shrank by 0.1 percent on a quarterly basis in the first quarter, taking the annual rate of decline to 0.5 percent.
Ahead of Wednesday's general strike, public bus services n Greece's second largest city, Thessaloniki, were halted over delayed worker payments. Ferry services was also due to come to a standstill on Tuesday and Wednesday, while unions have called a general strike on Wednesday.
"We have carried out dozens of general strikes during the bailout period ... clearly unions alone cannot solve the country's major economic and social problems. But this is to protest and expose what is happening," Yiannis Panagopoulos, leader of Greece's largest union, the GSEE, told private Skai television.
"The government is now implementing the measures that it once protested against ... they have surrendered to everything."
The debate on the new austerity measures began in parliament Monday and is due to end with a vote late Thursday.
Costas Kantouris in Thessaloniki contributed. Follow Gatopoulos at http://www.twitter.com/dgatopoulos and Kantouris at http://www.twitter.com/CostasKantouris