Tags: EU | Greece | Financial | Crisis

Unions to Strike as Greece Awaits First Rescue Payment

Wednesday, 12 May 2010 11:09 AM

Greek labor unions announced a new general strike to protest pension reforms next week, as government officials waited Wednesday for the first installment of a 110 billion euro ($140 billion) rescue package designed to stave off bankruptcy.

Greece's two main public and private sector unions set a walkout for May 20 — a day after Greece must repay some 9 billion euros ($11.4 billion) in expiring debt, using loans from its euro zone partners and the International Monetary Fund.

The Mediterranean country's acute debt problems, resulting from years of overspending and falsified accounts, battered global markets and weakened the euro. In response, the European Union and the IMF threw together a 750 billion euro ($952.35 billion) standby package early Monday to prevent the debt crisis from spreading and protect the common euro currency. That package came in addition to the billions already pledged to Greece.

On Wednesday, EU officials also advocated unprecedented scrutiny of countries' spending plans even before they go to their respective parliaments for approval, and serious financial penalties for countries that break the rules.

Greek finance ministry officials said a first installment of the international rescue package — 5.5 billion euro ($6.98 billion) from the IMF — was due later Wednesday. Athens also expects 14.5 billion euros ($18.4 billion) requested from the European Union to arrive just before the May 19 deadline.

Next week's strike will cancel flights, ferry and rail services, leave hospitals on emergency staff and close schools and public services. There will also be demonstrations in major Greek cities, raising fears of further street violence.

During riots in Athens last week, three workers died as a bank was torched by demonstrators. Some 100,000 people took to the streets to protest austerity measures the center-left Socialist government took to secure the international bailout.

Unions say those earning low wages will suffer disproportionately from the proposed increase in retirement ages and pension cuts. The reforms follow public service pay cuts and consumer tax increases that the government says will save 30 billion euros ($40 billion) over the next three years and bring the budget deficit under the EU ceiling of 3 percent of annual national output — compared to Greece's current 13.6 percent.

Giannis Panagopoulos, head of the GSEE private sector union, said further strikes would follow next week's walkout.

"To the unfair and anti-social fiscal measures announced by the government, there comes now to be added an equally unfair draft law on the social security system," Panagopoulos said.

GSEE and the ADEDY civil servant union already planned protests in central Athens later Wednesday.

The country's borrowing costs declined further Wednesday, with the yield difference between Greek and benchmark German 10-year bonds at 4.45 percentage points in afternoon trading — down from a record 10 points last week.

Stocks on the Athens stock exchange gained slightly, with the benchmark general index closing 0.8 percent up at 1,749.59 points.

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Greek labor unions announced a new general strike to protest pension reforms next week, as government officials waited Wednesday for the first installment of a 110 billion euro ($140 billion) rescue package designed to stave off bankruptcy.Greece's two main public and...
EU,Greece,Financial,Crisis
477
2010-09-12
Wednesday, 12 May 2010 11:09 AM
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