FACTBOX-Policies of the two main contenders in Greek vote

Oct 1 (Reuters) - Greek opposition socialist leader George Papandreou tried to sway undecided voters on Thursday, in a major campaign rally ahead of Sunday's election. [ID:nL1715762]

The incumbent conservatives and opposition socialists offer two very different strategies to fight an economic crisis. Here are their policies:

ECONOMY

* NEW DEMOCRACY: The government struggled to cope with a sharp economic slowdown. It supported banks with a 28 billion euros liquidity package but provided far less relief to the poor, and borrowed more than 50 billion euros so far this year.

It cut corporate and income tax rates and privatised state-run companies, such as flag-carrier Olympic Airlines [OLY.UL] in a bid to boost investment and create jobs. It raised indirect taxes, taxed dividends, struck a one-off tax on high-income earners and froze public sector pay.

Karamanlis has spelled out tough measures if re-elected to shore up the ailing public finances, including the following:

- Freeze salaries, pensions and hiring in the public sector in 2010 to curtail government expenses.

- Cut overtime pay and travel expenses in the public sector by 30 percent for the next two years along with salary cuts for lawmakers, the cabinet and mayors.

- Unemployment benefit will be cut to those who turn down two consecutive job offers by the government employment agency.

- Measures to boost cruise tourism, opening up of a number of closed professions and a "war on tax evasion". Streamline state railways OSE, which loses 2 million euros daily, and press on with privatisations.

* PASOK plans to take measures within its first 100 days in office to revive the economy and narrow the budget deficit. The measures would include the following:

- Spending at least 4 pct of GDP on public investment.

- Above-inflation wage increases to public sector workers and a one-off grant to low-income earners.

- Tax reform to redistribute income towards the middle class and low-income citizens, streamlining taxation from labour and capital, increasing the dividend gains tax.

- Closing loopholes in corporate tax and lower tax rates on re-invested corporate profits. Renegotiating past privatisation deals and dropping plans for others.

- Review of spending, particularly on defence, to narrow the budget deficit below a 3-percent euro area ceiling after a period of at least two years.

- A one-year freeze on the prices charged by state-controlled utilities, and a one-year suspension of bank debt obligations by crisis-stricken companies.

GOVERNMENT/ACCOUNTABILITY

Both parties have been plagued by corruption scandals.

* NEW DEMOCRACY imposed tougher penalties on breach of trust and increased transparency in public procurement. None of those involved in graft scandals went to trial and Karamanlis gave the impression that he tolerated or was unable to end graft.

* PASOK wants to improve transparency by posting all government, administration and court decisions on the Internet. It would reduce the number of ministries while separating the Finance Ministry from the Economy Ministry.

SOCIAL SECURITY

* NEW DEMOCRACY: In a pension reform that experts said did not go far enough, it cut the number of pension funds and introduced disincentives for early retirements. It wants to increase financial support for low-income pensioners, and has also pledged to hire thousands of doctors to improve health services.

* PASOK has pledged to further reduce the number of pension funds to reform the system and pledged to not cut any pension benefits. It aims to increase unemployment benefit and drastically cut joblessness within its first four years in office as well as raise minimum pensions.

SECURITY/IMMIGRATION/EDUCATION

* NEW DEMOCRACY: The government has fought illegal immigration with stiffer penalties for traffickers, longer detention periods for illegal immigrants and plans to build more camps to receive them. Its efforts to introduce private universities were hampered by student and opposition protests. The government has pledged to move ahead with the reform, which it said was necessary for a more competitive work force.

* PASOK wants to grant citizenship to all immigrant children born in the country. The socialists also promised local voting rights to immigrants with more than five years of residence. PASOK plans to reintroduce pedestrian police patrols to boost security, create a new Citizens' Protection Ministry and invest 5 percent of GDP in the public education system each year.