By Renee Maltezou and Harry Papachristou
ATHENS (Reuters) - Thousands of demonstrators began gathering in front of the Greek parliament Tuesday at the start of a two-day strike to protest against painful cuts demanded by international lenders as the price for more financial aid.
With Greece teetering on the edge of bankruptcy, parliament is due to vote this week on a package of spending cuts, tax increases and privatizations agreed as part of a massive bailout aimed at averting the euro zone's first default.
Following weeks of protests and rolling strikes, ADEDY, the public sector union representing half a million civil servants and GSEE, which represents 2 million private sector workers, are stepping up pressure on deputies before the votes.
Transport and public services were hit, schools were shut and many shops and businesses were closed, while the streets of central Athens were virtually deserted.
"We expect a dynamic and massive participation in the strike and the march to the center of Athens. We will have 48 hours of working people, unemployed, young people in the streets," ADEDY's leader Spyros Papaspyros told Reuters.
Deep in deficit and unable to borrow on financial markets, Greece depends on international support to keep going. A default would spread contagion around the 17-nation single currency area and cause a deep shock to the global economy.
Prime Minister George Papandreou appealed to lawmakers late Monday to back the austerity measures in two votes on Wednesday and Thursday, which he said represented the final chance for Greece to get back on its feet.
Although the socialists have a majority, with 155 deputies in the 300-seat house, some MPs have warned they may vote against the austerity plan. Analysts say the risk of the mid-term plan not passing is small, especially since it may win support from smaller conservative groups.
Euro zone authorities are working flat-out with banks and insurers to devise a scheme whereby private bondholders can share the burden of further funding for Greece without prompting credit ratings agencies to declare a selective default.
European policymakers are also quietly exploring contingency plans to keep Greece afloat with emergency liquidity if parliament were to reject all or part of the package, three euro zone sources told Reuters Monday.
The austerity plan has caused deep anger among Greeks disillusioned with years of political corruption and inefficiency and now bitterly resentful of the conditions imposed by the European Union and International Monetary Fund.
By midday Tuesday about 20,000 had assembled in hot sunshine in front of the parliament, with banners carrying slogans such as "Bankers are P.I.G.S., not people" but the mood appeared calm, despite some chanting.
More than 5,000 police are expected to be deployed in central Athens, especially to protect parliament, the focus of weeks of protests by demonstrators who have camped out in the neighboring Syntagma Square.
"They are asking the people to bow down for 50 years and pass even worse measures in the future," Communist party leader Aleka Papariga said in a statement.
In a sign the discontent has spread well beyond the union movement and far left, the Greek Confederation of Commerce (ESEE), a trade association of retailers, also rejected measures its leader Vassilis Korkidis denounced as "predatory."
It urged shopkeepers to raise Greek national flags at their stores and announced an Internet campaign to convince cabinet members and MPs to renege on the austerity plan.
Greece is stuck in its worst recession since the 1970s, with a youth unemployment rate of more than 40 percent and public finances shattered by a debt equivalent to some 150 percent of gross domestic product.
"Today, what is at stake for the country is its very future. Individually and collectively, we must all realize how crucial the situation is and join the collective effort for the big changes," Nicholas Nanopoulos said.
However the conservative opposition has refused to back the package and the view that the bitter medicine demanded by the EU and IMF will kill off any hopes of growth is widespread.
"The medium-term austerity package is a recipe that deepens the recession and puts Greece in deep freeze," Papaspyros said.
"We must get out of this situation fast, we need policies that support social cohesion and growth so that the people's lives will not go bankrupt," he said.
(Additional reporting by George Georgiopoulos)
(Writing by James Mackenzie, editing by Paul Taylor and Mark Trevelyan)