Greece Puts Off Austerity Talks Amid Strike

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Riot police officers detained a protester in Athens on Tuesday. A strike delayed further progress on the country's debt crisis.

ATHENS ? As thousands of Greeks walked off the job in a general strike on Tuesday to protest stringent new austerity measures, there was a growing sense that the country was reaching a critical point in its efforts to survive the debt crisis.

Greek political leaders postponed for yet another day a decision on an austerity package ? including 20-percent cuts to base pay for workers in private companies and a loosening of public sector job protections ? in exchange for the billions in loans Athens needs to prevent a default in March. With elections looming as soon as April, the parties fear that they are essentially being told to commit political suicide to save the country.

If that indeed is the case, analysts here say, it is not clear what will replace them, making Greece a potential laboratory for a volatile mix of austerity, populism and social unrest.

Not that the old order, widely derided as corrupt and inefficient, is likely to be deeply mourned.

For most Greek voters, the two larger parties participating in the fragile tripartite coalition of Prime Minister Lucas Papademos ? the Socialist Party and the center-right New Democracy ? were already drained of political capital before the debt crisis by decades of self-interest and corruption. That has now been capped by two years of unrelenting austerity that has hurt most Greeks but has ultimately failed to revive the system, or even change it in any significant way.

George Kirtsos, a political analyst and the owner of City Press, an Athens weekly, agreed that the old order is collapsing. ?But the problem,? he added, ?is there are no new political parties that can express a new dynamic era.?

With Athens shut out of the private lending markets, Greece?s so-called troika of official creditors ? the European Commission, European Central Bank and International Monetary Fund ? have repeatedly criticized the government for failing to make structural changes in its economy. But their plan of tax increases, spending cuts and now wage cuts has not only helped push the country into a deep recession, but has also stripped Greece?s political center, weak to begin with, of its last shreds of political legitimacy.

With unemployment at 19 percent, businesses closing, credit scarce and the proposed new wage cuts expected to further decimate the shrinking middle class, the hard left and extreme right are rising.

The issue that brought the looming political crisis to a head this week is the thorniest one yet: changes to the Greek labor market.

With Greek popular anger at the country?s foreign lenders rising ? a German flag was burned in front of Parliament at a demonstration on Tuesday ? the Socialists and New Democracy are treading a fine line: They want to push back against the troika enough to regain some political capital ? and keep more Greeks from falling into poverty ? but not push hard enough to precipitate a default.

If the Greek political leaders do not agree to accept the new austerity measures in the coming days, Greece will run out of time to complete a broader deal for the voluntary write-down of Greek debt before a bond comes due on March 20. If Greece cannot pay the bond, it will default, which could result in its leaving the euro zone, among other ill effects.

After years of turning its back on its social welfare platform, the Socialist Party, known as Pasok and Greece?s dominant political force since 1974, has virtually disintegrated, falling to fifth place with 8 percent support, according to a poll that the firm Public Issue released on Tuesday. Amid deep internal divisions, Finance Minister Evangelos Venizelos is expected to replace George A. Papandreou as party leader.

The poll, which questioned about 1,000 adults, found that the Democratic Left Party, a moderate left-wing party, garnered 18 percent support, more support than the Socialists had. The radical left Syriza Party is holding steady and the Greek Communist Party, which never split from Moscow during the cold war, is also holding its ground ? both have about 12 percent support.

Niki Kitstantonis contributed reporting.

Source: http://feeds.nytimes.com/click.phdo?i=6381b2f0a6ef4db11bbcebe00f02407d

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