Greece to vote on labor reform despite coalition split

ATHENS | Sat Oct 27, 2012 2:30pm EDT

(Reuters) - Greece's government plans to put labor reforms demanded by foreign lenders to a parliamentary vote despite a junior coalition partner's refusal to back them, the finance minister said on Saturday.

The government will present the 2013 budget law - which contains the bulk of new austerity measures demanded by lenders - in parliament on Wednesday, and a separate bill with reforms including the contested labor measures a few days later, Yannis Stournaras said.

Near-bankrupt Greece needs a comprehensive deal on the austerity package and reforms to unlock its next tranche of aid before it runs out of cash in mid-November. Greece's gross public debt is equivalent to 171 percent of its economic output, according to the International Monetary Fund.

The Democratic Left party has the support of 16 deputies in the 300-seat parliament and the government - which has a 176-seat majority - could pass the package without its support.

But a vote against the package by the party would undermine the already fragile coalition and perhaps tempt other lawmakers to defect and vote against unpopular measures.

Athens has been locked in talks with its European Union and International Monetary Fund lenders on the austerity package for months, but a final agreement has been held up by Democratic Left's objections.

"The government plans to bring the budget bill to parliament on Wednesday," Stournaras told reporters after a meeting with Prime Minister Antonis Samaras. The bill including the labor reforms will follow days later, he said.

Samaras's government is still hoping the party, led by moderate leftist Fotis Kouvelis, changes its stance, but was prepared to move ahead without its support, a government official said.

"From the government's side we want to be ready on everything relating to the budget, reforms ... with or without Kouvelis's agreement," the official said.

(Reporting by Lefteris Papadimas, writing by Deepa Babington; editing by Jason Webb)