Greek unions walk out, parliament cuts health costs

(ATHENS) - The Greek parliament early Thursday approved a bill to cut health service costs after unions staged walkouts as part of Europe-wide demonstrations against austerity measures.

The text that had been demanded by the European Union and the IMF to unblock a new aid plan for the debt-stricken country was adopted by a large majority, on the eve of an EU summit that should pave the way for fresh loans to Greece.

The bill, passed under an emergency procedure as parliament was surrounded by police, lays down a cut in pharmaceutical expenses through the development of computerised prescriptions and the use of generic medicines.

It also limits the public health budget by merging hospital groups and calls for setting up a unified pension scheme consolidating numerous groups whose current total deficit is put at 850 million euros for 2011.

The EU and International Monetary Fund made the passing of the text and other measures a condition for releasing a new bailout of 130 billion euros ($175 billion).

The latest rescue, after a 110-billion-euro EU-IMF loan in 2010, is tied to a massive debt writedown with private creditors designed to reduce Greece's 350-billion-euro debt by 107 billion.

Greek unions on Wednesday staged walkouts as part of Europe-wide anti-austerity demonstrations, hours after parliament approved fresh budget cuts linked to the new eurozone bailout.

The main labour groups, private-sector GSEE and public-sector ADEDY, began a nationwide three-hour work stoppage from midday (1000 GMT) ahead of a protest in central Athens in the evening.

Only around a thousand demonstrators gathered in the rain outside the parliament building in Athens for an anti-austerity concert, according to police.

Symbolic protests were also held outside the offices of the European Commission and the Acropolis.

"There aren't enough people unfortunately, not only because of the bad weather but because people are terrorised by the propaganda on the TV, which keeps telling us there's no alternative to austerity," said protester Yanna Sarabali, 53.

Alongside her, protesters chanted: "Resistance and struggle is the only way!"

The protests and stoppages were part of a day of action by European labour organisations against austerity measures in Greece and other struggling eurozone economies to address the debt crisis plaguing the single currency area.

"Unions in Greece will once more unite their voice with those in Europe against neo-liberal policies, demanding an equitable and fairer Europe," GSEE and ADEDY said.

Municipal workers also occupied town halls around the country during the three-hour walkout, their union said.

Separately, doctors held a one-day strike against the health spending cuts included in the new austerity bill.

Greek Prime Minister Lucas Papademos on Wednesday rejected a call for a special EU commissioner to be appointed to run his country's promised reforms in exchange for bailout aid.

"The new economic programme for Greece will be implemented by the Greek government and the Greek authorities," Papademos told a news conference after talks with the European Commission chief Jose Manuel Barroso in Brussels.

"In doing that, we welcome the support by the European Commission, the commissioners themselves and the Commission's services -- and I think this is sufficient," he said.

Papademos will attend a Eurogroup meeting of finance ministers on Thursday to discuss the Greek measures.

Papademos' coalition government late on Tuesday secured passage of a bill containing 3.2 billion euros in spending cuts, including new pension reductions.

Tuesday's measure included 12 percent cuts in civil servant pensions of more than 1,300 euros and reductions of between 10 and 20 percent in complementary pensions of more than 200 euros.

The legislation also foresees a 10 percent cut in the salaries of senior municipal officials and a merger of state research organisations.

Civil service pensioners have already had payments cut by 10 percent under measures adopted from 2010 in return for a previous EU-IMF bailout worth 110 billion euros.

The vote on Tuesday came after ratings agency Standard & Poor's (S&P) declared Greece in "selective default" owing to a proposed debt swap with private banks, a move that forced the European Central Bank to suspend Greek bonds as acceptable collateral for ECB loans.

The rating was lowered from S&P's already junk-level "CC" grade for Greece, which has been seeking to avoid an outright default on its massive debt by negotiating a "voluntary" debt exchange with creditors.

The bond swap was launched Friday and is scheduled to be completed on March 12, according to Greece's finance ministry.