Tags: Greeks | Strike | Wage | Cuts | austerity | Budget | Vote

Greeks Strike Over Wage Cuts Before Austerity Budget Vote

Wednesday, 22 Dec 2010 07:29 AM

Greeks staged a three-hour general strike in Athens on Wednesday against the 2011 budget which imposes yet more austerity on the debt-laden nation, but parliament was set to pass the bill later in the day anyway.

A public transport stoppage also paralyzed the city, but some Greeks questioned the point of countless strikes and protests this year which have failed to divert the government from an austerity path demanded by the nation's EU/IMF bailout.

At the same time the series of spending cuts and tax rises have failed to calm fears about Greece's ability to pull itself out of a debt crisis that has shaken the entire euro zone.

"We don't agree with austerity, but nothing is going to change. The government will not change policies just because we take to the streets," said 43-year old secretary Susanna Apostolaki, who was unsure whether she would take part in a protest rally in Athens.

Next year's budget includes more tax increases and wage cuts in state companies to put Greece back in line with terms of the EU/IMF bailout agreed in May, after some slippages this year.

Analysts say the additional austerity in 2011 will hurt the economy even more without guaranteeing the country will avoid a debt restructuring.

Fitch agency said late on Tuesday it may cut the country's credit rating next month to junk, as both other major rating agencies have already done.

The main public and private sector labor unions called the three-hour strike which started at 1000 GMT in Athens region.

On the capital's streets, people were split on whether to walk off the job.

About 2,000 people gathered in front of parliament to protest the budget, with banners reading "We will strike until we win", but others doubted this would have any impact.

The government holds 156 seats out of 300 in parliament and the budget is expected to be approved despite growing discontent among the ruling PASOK party ranks.

Like many Greeks, Apostolaki feared more belt-tightening next year and urged the government to do more to fight tax evasion. "They should make a serious effort to take money from those who robbed the state. I have never put my hand in others' pockets."

"LAST CHANCE?"

Greek bond and stock markets were little changed on Wednesday after the Fitch warning. "It seems the market has already discounted the downgrade," said Vasillis Vlastarakis, analyst at Beta Securities in Athens. "Even if it happens, it won't have a great effect on the market."

The move would bring Fitch's rating in line with Moody's and Standard & Poor's, who already have sub-investment grade ratings on the country, and both are on review for further downgrades.

Greek bank stocks were down less than 1 percent on Wednesday but had dropped 5 percent on Monday on rumors of a Fitch downgrade.

Athens bus and subway drivers have been holding on and off strikes for two weeks, keeping Christmas shoppers from the city centre, adding to the strain of recession-hit retailers.

The government threatened to break the transport strikes with emergency legislation it used earlier this year to end action by truck drivers and other transport workers.

"Everyone has to show responsibility ... the state has all the powers it needs to protect the public interest," government spokesman George Petalotis said in a television interview.

Prime Minister George Papandreou has expelled four deputies for disagreeing publicly with his austerity policies but unrest is growing in his party.

"I am giving the government a last chance," said PASOK deputy Thomas Robopoulos during the budget debate on Tuesday.

The socialists, who revealed a gaping budget deficit after coming to power last year, have braved public discontent and taken draconian measures to meet the bailout terms.

This year, the government has already cut public sector wages by about 15 percent, increased the retirement age, frozen pensions and cut public spending. But it has failed to boost tax collection as much as targeted, despite a hefty VAT increase.

Partly as a result of the measures, the economy is forecast to shrink 3 percent next year after a 4.2 percent drop in 2010, with unemployment jumping to a record 14.6 percent from an estimated 12.1 percent this year.

Greece targets a budget deficit of 7.4 percent of GDP next year, down from about 9.4 percent this year.

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Greeks staged a three-hour general strike in Athens on Wednesday against the 2011 budget which imposes yet more austerity on the debt-laden nation, but parliament was set to pass the bill later in the day anyway. A public transport stoppage also paralyzed the city, but...
Greeks,Strike,Wage,Cuts,austerity,Budget,Vote
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2010-29-22
Wednesday, 22 Dec 2010 07:29 AM
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