Public employees demand big raise from Lebanese parliament

BEIRUT (Reuters) - Thousands of Lebanese teachers, civil servants and children rallied outside parliament on Wednesday in the biggest of a year of pay protests as the assembly debated a much-delayed bill on public sector salaries.

The draft being discussed in parliament fell far short of the demands for a doubling of pay, as the government struggles with a ballooning deficit and an economic slowdown.

The International Monetary Fund last week urged Lebanon to implement structural reforms to balance its budget deficit, and called for public sector pay restraint.

Protesters' demands for at least a doubling of pay would cost the state hundreds of millions of dollars a year. The bill under discussion proposes much lower increases, to be offset by an increase in value added tax.

But feelings among public sector workers are running high.

"You can't live on our salaries," Laurent Chidiac, a primary school drama teacher who travelled 13 miles (20 km) from the Christian seaside town of Jounieh to Beirut.

He said teachers were paid around $700 a month, and the protesters wanted that to be doubled "at the very minimum".

Teachers began staging protests a year ago. Their latest strike has kept state schools closed since last week.

"Stop your procrastinating!" read some of the signs held aloft at the march.

Government finances have been strained by the effects of labour unrest and power cuts as well as long-standing electricity subsidies.

In 2012, the primary budget turned negative and last year the fiscal deficit was 9.3 percent of GDP, with the debt burden at 141 percent of GDP.

Economic growth dropped to about 1.5 percent last year from an average of eight percent a year between 2007 and 2010. The IMF says it could rise to 4 percent in the medium term with the right structural reforms, including cutting state spending.

Members of parliament told Reuters that a much-amended public sector pay bill could pass on Wednesday, but could also be delayed again.

Ali Ammar, a member of parliament for the Islamist Hezbollah party, told reporters that parliament had been "trying since this morning to discuss the draft law, article by article".

The Lebanese government that assumed office in February took a year to form. Another political vacuum looms this month, as President Michel Suleiman comes to the end of his five-year term with no successor in sight after three rounds of voting in parliament.

Still struggling to recover from its own 1975-1990 civil war, Lebanon has found its internal rifts aggravated by the conflict in Syria, whose sectarian divisions mirror its own.

A million Syrian refugees have entered Lebanon, equivalent to a quarter of the resident population, and rebels have crossed into Lebanese border regions to take refuge from forces loyal to Syrian President Bashar al-Assad.

(Reporting by Oliver Holmes and Laila Bassam; Editing by Kevin Liffey)