Greeks strike against pension reform, test government

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Thousands of Greeks will march on parliament on Thursday in the first major anti-austerity rally since three people died in a massive demonstration this month.

Ships will be docked, domestic flights will be disrupted and public services will close as workers strike for 24 hours in a test of the government's resolve to implement reforms aimed at pulling Greece out of a severe debt crisis.

A 50,000-strong anti-austerity march on May 5 turned violent when protesters lobbed petrol bombs at a bank in Athens killing three employees, including a pregnant woman.

It was the worst violence to hit Greece since riots paralyzed Athens for weeks in December 2008.

Investors will be watching closely Thursday's march for any signs of unrest that could threaten the implementation of unpopular reforms including tax hikes, public wage cuts and an increase of the retirement age.

Unions representing 2.5 million workers, or half of the country's workforce, are particularly angry about a pension bill unveiled last week to raise the retirement age and curtail early retirement.

"The government has presented a draft bill which will lead to the collapse of the social security system and hurt young generations mostly. This bill must be withdrawn," said Ilias Vrettakos, deputy president of the public sector union ADEDY.

"People are bleeding financially but they will participate in the strike tomorrow," he told Reuters.

Opinion polls show most Greeks agree reforms are necessary to stem the country's debt crisis but they are angry because they believe the burden is being unfairly shouldered by the poor while the rich evade taxes.

SUMMER LULL

The repeated strikes and protests often marred by violence have affected the key tourism sector, with industry bodies saying thousands of cancellations in Athens followed the May 5 violence. [ID:nLDE64G0N2]

Air traffic controllers, members of ADEDY, said they would not strike on Thursday because they did not want to hurt tourism as Greece struggles with recession. But other unions walkouts are expected to affect domestic flights.

Labour unions have warned of more strikes if the government leaves the draft pension reform bill unchanged before it is voted in parliament early June.

Political analysts say the government could then face a short period of relative calm as Greeks flee the capital for the summer, but come autumn, people could demand to see their sacrifices are paying off or take to the streets.

Greece fully repaid a 10-year, 8.5 billion euro ($10.55 billion) bond on Wednesday, overcoming a major refinancing hurdle thanks to EU and IMF aid.