Greece headed for a cliffhanger vote on austerity measuresneeded to keep the bailout on track as a 48-hour general strikebegan and European officials squabbled over the timing of a deal tounlock rescue funds.

European Union Economic and Monetary Affairs Commissioner OlliRehn, speaking at a meeting of Group of 20 finance chiefs in MexicoCity, said yesterday that a deal must be made at a meeting of EUfinance ministers in Brussels on Nov. 12. A European G-20 official,speaking before Rehn and on condition of anonymity, cast doubt onthe prospects for that deadline, saying officials may fallshort.

Greece is under pressure to make more efforts to rein in itsbudget deficit and deregulate the economy. While German ChancellorAngela Merkel last month travelled to Greece to signal herwillingness to keep Greece in the euro, the country is stillstruggling to hit its debt reduction targets amid a combination ofGreek political resistance to more cuts and economic collapse.

“We need to have a common view on how to reduce the debt burdenby the 12th of November,” Rehn told reporters. “I'm confident thatwe will be able to reach that common view.”

Greece has received 240 billion euros ($307 billion) in aidpledges from the EU and the International Monetary Fund since 2010.The parliament's finance committee today agreed to fast-track abill of austerity measures and economic reforms submitted by PrimeMinister Antonis Samaras's government late yesterday.

Lawmakers must ratify the bill for Greece to ensure speedypayment of the next bailout tranche and avoid bankruptcy, FinanceMinister Yannis Stournaras told the committee today. The packagewill raise the retirement age and make further cuts to wages andpensions.

“Chances are that the bills will pass, in our view,” CitigroupInc. economists Giada Giani and Juergen Michels wrote in a reportto investors yesterday. Should they not pass, a Greek exit from theeuro “will come back on the agenda. If Samaras' government is notable to get the bills through parliament, this is likely to changethe recently more supportive stance from Greece's creditorcountries, especially Germany.”

Internal Dissent

Samaras must face down dissent within his three-party coalitionto get the measures approved, with the Democratic Left party'slawmakers saying they won't vote for the bill because of proposedchanges to labor law that among other things will cut wages forpublic workers. Unions began a 48-hour general strike today toprotest against the measures, which will be voted on as soon astomorrow and followed by another vote on the 2013 budget on Nov.11.

More than 35,000 Greeks marched in central Athens to demonstrateagainst the new wave of cuts. There have been no arrests or reportsof violence, Police spokesman Takis Papapetropoulos said.

As G-20 finance ministers and central bankers warned euro- arealeaders not to delay pledged policies aimed at resolving thethree-year-old debt crisis, policy makers in the 17-membersingle-currency bloc are working to repair Greece's finances andforge closer European banking cooperation.

German Finance Minister Wolfgang Schaeuble said after themeeting that the EU won't have an operational bank-supervision bodybefore 2014, as the crisis is resolved “step by step.”

“It's not going to happen quickly, but it has to work,”Schaeuble told reporters yesterday in Mexico City. Officials at themeeting didn't speak in detail about Greece, Schaeuble said.

The G-20, which diluted budget-cutting commitments out ofconcern that U.S.-led austerity would choke already fragile globalgrowth, lauded the European Central Bank for unveiling abond-purchase program to stabilize the single currency. At the sametime, political decisions must be implemented, the G-20 said.

Rehn hailed Europe's determination to do “whatever it takes” tostabilize the currency, saying that a banking union would befollowed by a centralized bank-resolution mechanism — and then a“genuine” economic and monetary union.

“We expect that these actions will lead to a gradual recovery,but somewhat later than previously expected,” Rehn said.

Debt Sustainability

The European official who questioned the Nov. 12 target andspoke on condition of anonymity because the negotiations aren'tpublic said next week's Brussels meeting will be a step in theprocess. A package deal has to include both prior actions by theGreek government on fiscal and economic measures and an agreementfrom creditors on filling the country's finance gap and making debtsustainable. A list of options is being reviewed, the officialsaid.

“We would need a combination of elements,” Rehn said.

Separately, Spanish Economy Minister Luis de Guindos said inMexico City yesterday that his government will make a decision onasking for a bailout when it's ready. He said he didn't come underany pressure from G-20 officials.

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