Thousands of Greeks have rallied against deficit-cutting measures during a national public strike. Flights have been grounded, many schools are closed and hospitals are operating on emergency-only services. Government offices and courts were closed, though public transportation largely continued to operate.
On Tuesday, Prime Minister George Papandreou’s socialist government announced that it intends to raise the average retirement rate in a bid to save the cash-strapped pension system. The age of retirement varies for different public services, but in general women can retire at 60 and men at 65; the government wants both men and women to retire at 65 by the year 2015.
The news comes on top of other planned austerity measures, including a public sector salary freeze and a raise in petrol prices, announced last week. Further government measures include the non-replacement of departing civil servants and a tax collectors recovering billions of euros lost to tax evasion. The government has announced $2.75 billion in public spending cuts. It also aims to raise another $6.87 billion from new taxes and measures aimed at fighting tax evasion, which analysts said deprived the federal budget of $44.2 billion last year. The government also announced that the price of unleaded gasoline will rise 0.14 euro cents a litre. Mr. Papandreou, who wants to free pay, gather more taxes and reform pensions, insisted that the proposals would be fully implemented.
Despite heavy rain, there have been rallies across Greece throughout the day, with thousands of striking workers and pensioners gathering in the capital, Athens. The protestors began the 24-hour walkout at 9 a.m. (2 a.m. ET), though local media said workers at Athen’s main international airport began their strikes at midnight, grounding all flights. Several thousand people were also reported to have protested in Greece’s second city, Thessaloniki. The rallies have been mainly peaceful, but in one incident police fired tear gas at garbage collectors who tried to drive through a police cordon. Some demonstrators threw stones at the police but the trouble was quickly defused. A protest in Athens’ Syntagma Square, while loud, petered out in the late morning, when rain dispersed the crowd of about 1,000.
Even many of those protesting said they realized they needed to make sacrifices. Others expressed hope that the European Union would rescue their proud democracy from becoming the next Iceland. Dimitris Vitalis, 21, a university student, said he feared the government would make higher education unaffordable. “The education is free now, but they will want us to pay tuition fees,” he said. (Globe & Mail) A diplomat, who did not want to be named, said today’s protests seemed fairly tamed in a city where protests are common. “The unions protest because that’s what unions do here,” he said. “There is tourist season and protest season.” (G & M)
The umbrella civil servants trade union ADEDY, which called the strike, said most of its 500,000 workers were on strike, though that number could not be confirmed. ADEDY Vice President Ilias Vrettakos said he recognizes the government’s problem, but that it is not the worker who should suffer. He said the bankers created the problem for Greece, so the bankers should pay. Vrettakos said the union is willing to compromise only if the government first attacks what the union sees as widespread corruption among top levels of society.
The unions regard the austerity program as a declaration of war against the working and middle classes. Their resolve is strengthened by their belief that this crisis has been engineered by external forces, such as international speculators and European central bankers. Others in the capital either see the cuts as necessary or argue that the strike is politically motivated.
Greece’s deficit is, at 12.7%, more than four times higher than eurozone rules allow. The markets remain skeptical that Greece will be able to pay its debts and many investors believe the country will have to be bailed out. The uncertainty has recently buffeted the euro and the problems have extended to Spain and Portugal, which are also struggling with their deficits. The possibility of Greece or one of the other stricken countries being unable to pay its debts – and either needing an EU bailout or having to abandon the euro – has been called the biggest threat yet to the single currency.
Greece has been under intense pressure from other members of the EU to cut its budget deficit and is in danger of failing to refinance some $28 billion in debt coming due in April and May. In Greece, commentators said the economic problems had exposed a general ignorance about the harsh realities of the global economy, while laying bare the strong sense of entitlement in a country where one out of three Greeks is employed in a civil service that guarantees jobs for life.
EU leaders will discuss Greece’s difficulties on Thursday amid concern that the crisis could threaten the euro. European finance ministers are also due to hold a teleconference on Wednesday to talk about the issue. Some business media reported that Germany is preparing to lead a possible bailout, supported by France and other eurozone members.