Economy up, reforms passed but Greeks still angry

Greece wants to create a cash buffer of up to 19 billion euros (S$31 billion) to cover debt repayments after it exits its current bailout programme and plans three new bond issues by August.

ATHENS (REUTERS) - It was a victory for Greece's government but you would not know it.

The latest vote in parliament was not popular.

It passed a swathe of reforms demanded by international lenders, including making it harder to strike.

Greek protester Ilias Katziotis, a pensioner, says: "We, the older generation, spilled blood to acquire the right to strike, to have a voice. We will not sit on the couch with our arms crossed, we will ruin the government's plans."

The market perception of Greece is that it is much stronger.

One illustration - the rapidly closing gap in bond yields.

Mr Bill Blain, a capital markets strategist at Mint Partners, says: "Now we're getting to a stage where Greek 10-year bonds are yielding somewhere in the region of 3.5 per cent which isn't that far away from where we expect the 10-year US Treasury to go."

The economy too is picking up but at a huge political cost.

Mr Blain adds: "We are seeing a pickup in jobs but there is still enormous unhappiness about the austerity regime. It's likely that we will see the ending of the current arrangements which will push it onto a new track. The question is how sustainable politically will that track become."

Eurozone finance ministers meet next week to decide if Greece has done enough to conclude the third review of its current €86 billion programme.

The reward will be €6.5 billion of new loans.

The process has left the government badly damaged but the new strike law will be welcomed by some businesses.

50 percent of the workforce must now support strike action instead of just a third. Many bosses are hoping it will improve productivity.

Greece currently lags the EU average by 20 per cent.