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Athens - Greek protesters vowed on Tuesday to cordon off parliament to prevent deputies from debating new austerity measures, and unions said they would bring the country to a halt in a national strike on June 15.
Pressure is growing on Prime Minister George Papandreou's government, which is trying to muster support for a five-year plan that its international lenders say is crucial for them to extend more funding and enable Athens to avoid default.
European Union leaders and the European Central Bank are also split over whether private bondholders should share the burden of a fresh bailout plan.
Papandreou's Socialist party is due to submit its mid-term plan for discussion in parliament on Wednesday, with the goal of passing it later this month.
But protesters staging daily demonstrations that have swelled to tens of thousands in Athens' Syntagma square in front of parliament said they would encircle the building.
"Now that the government is putting the medium term austerity programme to vote, we (will) encircle the parliament, we (will) gather and we (will) stay at Syntagma," the self-named People's Assembly of Syntagma Square said in a statement.
"Our first stop is the general strike of June 15th. We won't stop until they withdraw it."
Public sector union ADEDY, representing half a million workers, said they would march on parliament during Wednesday's strike and join non-union demonstrators in peaceful protest.
"The mid-term plan must not be voted. We want them to change their minds and throw the plan in the bin," ADEDY Secretary General Ilias Iliopoulos told Reuters.
Pressure and discontent
On Monday, credit ratings agency Standard & Poor's made Greece the lowest-ranked country it covers and said it looked increasingly likely that Athens would restructure its €340bn debt load, a move it would see as a default.
That helped push Greek 10-year bond yields to a record high of 17.51%. Greece sold €1.625bn of 6-month T-bills on Tuesday, with the yield rising by 8 basis points compared to the previous auction, in May.
EU Commissioner for economic and monetary affairs Olli Rehn told a German paper a solution was not as far off as some might think and talked about a possible deal in which banks holding Greek bonds are encouraged to buy more as their holdings mature.
But ratings agencies have warned they would see such a move as default, and the ECB has rejected any type of private sector involvement in debt restructuring that is not completely voluntary by banks holding Greek bonds.
The EU and the IMF want all Greek parties to give their support for the package ahead of a June 20 meeting of EU finance ministers and a June 23-24 EU summit when leaders will discuss a new plan worth €120bn to replace last year's deal.
That discussion, and passage of the government's mid-year austerity plan, are central to the release of a €12bn tranche that Greece needs to roll over debt.
But the conservative opposition party New Democracy has refused to back the plan. Complicating matters, Papandreou's PASOK party, which has a majority and is expected to pass the package, has also fallen behind in opinion polls.
The package envisions new tax hikes and spending cuts this year as Athens has fallen behind on key fiscal targets.
Austerity measures have hammered the economy, though, and a 5.5% contraction in first quarter gross domestic product and unemployment above 16% have fuelled discontent.
The Greek commerce umbrella association representing small businesses said on Tuesday it would protest against the new tax hikes with its members shutting their shops for three hours.
"The answer to the country's big problem, recession, cannot be other than a restart of economic activity and investment in the small business sector, which is the spine of employment," GSEE and ESEE said in a statement.
Pressure is growing on Prime Minister George Papandreou's government, which is trying to muster support for a five-year plan that its international lenders say is crucial for them to extend more funding and enable Athens to avoid default.
European Union leaders and the European Central Bank are also split over whether private bondholders should share the burden of a fresh bailout plan.
Papandreou's Socialist party is due to submit its mid-term plan for discussion in parliament on Wednesday, with the goal of passing it later this month.
But protesters staging daily demonstrations that have swelled to tens of thousands in Athens' Syntagma square in front of parliament said they would encircle the building.
"Now that the government is putting the medium term austerity programme to vote, we (will) encircle the parliament, we (will) gather and we (will) stay at Syntagma," the self-named People's Assembly of Syntagma Square said in a statement.
"Our first stop is the general strike of June 15th. We won't stop until they withdraw it."
Public sector union ADEDY, representing half a million workers, said they would march on parliament during Wednesday's strike and join non-union demonstrators in peaceful protest.
"The mid-term plan must not be voted. We want them to change their minds and throw the plan in the bin," ADEDY Secretary General Ilias Iliopoulos told Reuters.
Pressure and discontent
On Monday, credit ratings agency Standard & Poor's made Greece the lowest-ranked country it covers and said it looked increasingly likely that Athens would restructure its €340bn debt load, a move it would see as a default.
That helped push Greek 10-year bond yields to a record high of 17.51%. Greece sold €1.625bn of 6-month T-bills on Tuesday, with the yield rising by 8 basis points compared to the previous auction, in May.
EU Commissioner for economic and monetary affairs Olli Rehn told a German paper a solution was not as far off as some might think and talked about a possible deal in which banks holding Greek bonds are encouraged to buy more as their holdings mature.
But ratings agencies have warned they would see such a move as default, and the ECB has rejected any type of private sector involvement in debt restructuring that is not completely voluntary by banks holding Greek bonds.
The EU and the IMF want all Greek parties to give their support for the package ahead of a June 20 meeting of EU finance ministers and a June 23-24 EU summit when leaders will discuss a new plan worth €120bn to replace last year's deal.
That discussion, and passage of the government's mid-year austerity plan, are central to the release of a €12bn tranche that Greece needs to roll over debt.
But the conservative opposition party New Democracy has refused to back the plan. Complicating matters, Papandreou's PASOK party, which has a majority and is expected to pass the package, has also fallen behind in opinion polls.
The package envisions new tax hikes and spending cuts this year as Athens has fallen behind on key fiscal targets.
Austerity measures have hammered the economy, though, and a 5.5% contraction in first quarter gross domestic product and unemployment above 16% have fuelled discontent.
The Greek commerce umbrella association representing small businesses said on Tuesday it would protest against the new tax hikes with its members shutting their shops for three hours.
"The answer to the country's big problem, recession, cannot be other than a restart of economic activity and investment in the small business sector, which is the spine of employment," GSEE and ESEE said in a statement.
