Disillusioned Greeks despair at political drama

ATHENS (Reuters) - Already exasperated by a seemingly endless wave of pay cuts and tax hikes, Greeks watched the latest political drama unfolding in their capital with a mixture of despair and disbelief.

In an extraordinary week even by the chaotic standards of Greek politics, Prime Minister George Papandreou first declared a vital bailout lifeline would be put to a popular vote before backing down in the face of an uproar at home and abroad.

"We are suffering from austerity and this man is smiling in parliament and telling us the referendum plan was just a joke," said Alexandra Rouva, a 27-year-old Greek who has been unemployed for more than a year.

"Well, this is not the right time for stupid jokes. He cannot play with our lives."

Financial markets, European leaders and ordinary Greeks glued to their television screens have held their breath as the government teetered on the verge of collapse and squabbling politicians raised fears Greece would be pushed to bankruptcy.

For many Greeks grappling with the harsh reality of shrinking salaries, smaller pensions and unemployment at a record high, the political theatrics were too much to swallow.

"I want them out. All of them," said Efi Peroyannaki, a 50-year-old saleswoman in a shop selling fine Italian suits.

"What happened this week was a disgrace. We looked bad and Europeans are already sick of paying for us."

The referendum plan has since met a quick death, but Papandreou still faces a confidence vote later on Friday and many Greeks fear a government collapse could set in motion a chain of events that plunges the country into further chaos.

"Papandreou may get the 151 votes he needs in parliament tonight, but what does this mean for us? " said Panayiotis Theofilas, 52, a furniture store owner squeezed by higher taxes and fewer purchases by cash-strapped customers.

"This instability is killing us. Yesterday I spent all day in front of the television worrying. I couldn't work. What if they throw us out of the euro? We are finished."

Greece is struggling through a fourth year of recession, with frequent protests and strikes against the bitter austerity pill of higher taxes and lower salaries.

The government slashed pensions and state wages by about 20 percent in 2010 and last month set a new wage scale that public sector workers expect will lead to further salary cuts.

Papandreou's government has also broken a century-old taboo by agreeing public sector layoffs in a country where the constitution guarantees state workers jobs for life.

For many Greeks convinced that a corrupt political elite is to blame for their woes, any outcome to the political crisis is expected to be a disappointing one.

Some like shopowner Theofilas, for example, say the idea of conservative opposition leader Antonis Samaras coming to power now is just as unpalatable as Papandreou staying on.

The idea of a so-called unity government being discussed has Greeks even less excited.

"They have nothing in common and they don't agree on anything. We all feel so disappointed," Theofilas said, referring to Papandreou and Samaras.

"Thank God my children don't understand how bleak their future is."

(Writing by Deepa Babington, Editing by Rosalind Russell)