GREEK PREMIER George Papandreou faces a key test as workers stage a backlash against a tough new swathe of austerity measures, the third in as many months. At issue is whether a one-day stoppage yesterday and further action next week can be contained, or whether it intensifies, triggering social unrest.

As the sunshine returned this week, ending an unseasonably chilly spell, the mood in downtown Athens was fatalistic. In the rush-hour din, workers readily expressed anxiety at pay cuts and tax hikes. Yet many said they were resigned to their fate, adding that there was scant appetite for prolonged industrial agitation on the streets.

Greece has a long history of violent protest, a legacy of the brutal repression of the country’s left when a military junta held power between 1967 and 1974.

There was but a small degree of violence during the national strike yesterday. Still, the fact that private and public sector unions could call tens of thousands of marchers to the streets suggests the tradition of protest remains strong to this day.

At this point, however, few analysts expect any indefinite strike action. Any moves in that direction would indeed spell fresh trouble for Papandreou, whose father and grandfather each served as prime minister. This is, however, but one of his many worries.

Under the cold eye of international capital markets, he is battling to undo decades of fiscal irresponsibility while seeking to assert control over rampant tax evasion and corruption. With ordinary taxpayers on the hook in a succession of dire budget plans, he is under pressure to demonstrate that the burden will be shared in an equitable way.

It’s a tough task. A new report by the local branch of anti-corruption agency Transparency International says more than 13 per cent of Greeks resorted in 2008 to the payment of “fakelakia” – bribes in “little envelopes” – for preferment in the health, planning, tax and other public systems.

Separately, Athens residents were astonished to read that many in a large group of doctors living in one of the city’s plushest neighbourhoods declared annual income of no more than €15,000. The same people, it was said, send their children to private schools and travel on their yachts to summer homes on the Greek islands. By tradition, they keep an apartment in central Athens and a house in the suburbs.

Hence the clamour for more equity in the tax system, something the government claims it is determined to deliver.

Because previous promises proved empty, this renewed commitment from the government meets with plenty of shrugs of the shoulder on the streets of Athens.

Papandreou’s new budget plan appeased the EU authorities and won a measure of market support when a 10-year €5 billion bond issue was almost three times oversubscribed, albeit at a hefty price.

At their monthly meetings next week, euro group and EU finance ministers are set to approve the plan. Although the government has told Brussels that the budget profile is ahead of schedule, it pointed to risks flowing from a worsening in the macroeconomic environment, and high bond yields.

Prime among many unanswered questions, however, is whether the plan will wash with the beleaguered Greek people, who are being asked by a Socialist government to take the rap for state profligacy on a grand scale. In the five years to 2009, for example, Papandreou’s predecessor increased the number of civil service jobs by more than 75,000. Irrational? Exuberant? Downright dangerous? All are true.

Ireland’s economic crash had its roots in a property addiction – and numerous other domestic foibles, among them a rapidly expanding State sector. The problem in Greece is narrower in its focus: a bloated, underfunded state system that used bureaucracy as a tool for the maximisation of employment.

Dragging on a cigarette beside a taxi rank at Syndagmatos square – scene of a violent outburst yesterday in front of the Greek parliament – insurance executive Nikos Kokkotos (28) said the country should have embarked down the austerity path long ago.

“The people are angry, but I think that all together we have done this,” he said. “I think that strikes are not good this time. They will not help. I see that in my job. Every day it becomes more difficult.”

Mary Stergiou, a biologist in her 40s, said salaried workers in the public sector were very unhappy that their pay was being cut. “They don’t understand what is going on, that they must pay from their salaries for all these problems, because we are people that work a lot,” she said.

“I work in a general hospital, 24 hours on call, and other people think that the Greek people are lazy.”

Yesterday’s stoppage – which brought transport, health and public administration systems to a halt – was but one of a series. Taxi drivers stopped work for two days last week in protest at a decision to tax them on their actual income rather than a flat rate. In a separate protest, interior ministry officials walked off the job and blockaded their building.

All this is seen from Brussels as a test de resistance, a crucial gauge of the real level of opposition to a plan that seriously dilutes a pay regime in which monthly civil service salaries are topped up with two additional salary payments per year.

Despite the anger, however, analysts expect no more than a series of noisy protests in the coming days. They say sporadic street violence remains possible, but add that recent protests have been quite tame by Greek standards.

“I think that the key groups in society are scared of the intensity of this crisis,” said George Pagoulatos, an associate professor at Athens University of Economics. As a result, he argued, there is no desire for havoc or chaos on the streets.

“It would be abnormal not to have strikes. There has never been a Greek government in modern times that has adopted measures of such intensity.”

Although locals say the traditional alignment of the trade unions with Papandreou’s socialist party may ultimately protect him, others fear that Greece’s still-strong community of anarchists could make yet more trouble in the coming weeks.

Papandreou can proceed but one day at a time.