UPDATE 2-Greeks protest before 2011 austerity budget vote

* 5,000 rally against austerity

* Parliament set to pass 2011 budget late at night

* Markets nervous but Fitch “junk” warning discounted

* Labour unions organised 3-hour work stoppage in Athens

* Athens public transport on 24-hour strike

(adds turnout at rally, colour, vox pop)

By Renee Maltezou and Ingrid Melander

ATHENS, Dec 22 (BestGrowthStock) – Thousands took to the streets of
Athens on Wednesday to protest against the 2011 Greek budget
which imposes yet more austerity on the debt-choked nation, but
parliament was set to pass the bill later in the day anyway.

Public transport ground to a halt in the capital as about
3,000 protesters rallied peacefully in front of parliament
shouting “We can’t take it any more”.

“We have no hope, we are just drowning,” said Apostolos
Kostopoulos, 46, a technician at the Public Power Corporation,
whose salary was cut. “Parliament is voting today on a budget
that will plunge people deeper into poverty,” he said as others
waved a large Greek flag covered with “For Sale” tags.

Another 2,000 people joined a separate anti-austerity march,
but overall turnout was much smaller than in previous protests.
Some Greeks questioned the point of countless strikes and
marches this year which have failed to divert the government
from an austerity path demanded by the nation’s EU/IMF bailout.

“We don’t agree with austerity, but nothing is going to
change. The government will not change policies just because we
take to the streets,” said 43-year-old secretary Susanna

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For factbox on final budget draft, click on [ID:nLDE6AH18M] Key Greek economic indicators http://r.reuters.com/bus33r For an interactive timeline on the Eurozone debt crisis in 2010, click on http://link.reuters.com/can23r ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

The new spending cuts and tax rises in next year’s budget
have failed to calm fears about Greece’s ability to pull itself
out of a debt crisis that has shaken the entire euro zone. Fitch
agency said late on Tuesday it may cut the country’s credit
rating next month to junk.

The 2011 budget includes more tax increases and wage cuts in
state companies to put Greece back in line with terms of the
EU/IMF bailout agreed in May, after some slippages this year.

Analysts say the additional austerity will hurt the
recession-bound economy even more without guaranteeing the
country will avoid a debt restructuring.

The main public and private sector labour unions had called
workers to walk off the job from 1000-1300 GMT in the Athens
region, but no official estimate of participation was available.

The government holds 156 seats out of 300 in parliament and
the budget is expected to be approved despite growing discontent
among the ruling PASOK party ranks.


Greek bond and stock markets were little changed on
Wednesday after the Fitch warning. “It seems the market has
already discounted the downgrade,” said Vasillis Vlastarakis,
analyst at Beta Securities in Athens. “Even if it happens, it
won’t have a great effect on the market.”

The move would bring Fitch’s rating in line with Moody’s and
Standard & Poor’s, who already have sub-investment grade ratings
on the country, and both are on review for further downgrades.

Greek bank stocks were down less than 1 percent but had
dropped 5 percent on Monday on rumours of a Fitch downgrade.

Athens bus and subway drivers have been holding on and off
strikes for two weeks and will not work at all on Wednesday,
keeping Christmas shoppers from the city centre and adding to
the strain of recession-hit retailers.

The government threatened to break the transport strikes
with emergency legislation it used earlier this year to end
action by truck drivers and other transport workers.

The socialists, who revealed a gaping budget deficit after
coming to power last year, have braved public discontent and
taken draconian measures to meet the bailout terms.

This year, the government has already cut public sector
wages by about 15 percent, increased the retirement age, frozen
pensions and cut public spending. But it has failed to boost tax
collection as much as targeted, despite a hefty VAT increase.

Partly as a result of the measures, the economy is forecast
to shrink 3 percent next year after a 4.2 percent drop in 2010,
with unemployment jumping to a record 14.6 percent from an
estimated 12.1 percent this year.

Greece targets a budget deficit of 7.4 percent of GDP next
year, down from about 9.4 percent this year.
(Writing by Ingrid Melander; Editing by David Stamp)

UPDATE 2-Greeks protest before 2011 austerity budget vote