New Greece austerity move prompts strikes and protests
- 22 September 2011
- From the section Europe
Greece is being hit by a 24-hour public transport strike in the latest protest against government austerity measures.
The government has toughened its measures, cutting pensions further and suspending more civil servant posts.
It says this must be done to receive a vital 8bn-euro (£6.9bn) tranche of aid.
The EU said it would not allow either an uncontrolled default of Greek debt or the country to leave the eurozone, the bloc's economic commissioner said.
"An uncontrolled default or exit of Greece from the eurozone would cause enormous economic and social damage, not only to Greece but to the European Union as a whole, and have serious spillovers to the world economy," Economic and Monetary Affairs Commissioner Olli Rehn said.
"We will not let this happen," he added.
However, Mr Rehn, speaking in Washington, did not explicitly rule out the possibility of Greece defaulting.
The Greek government says its tougher measures are an attempt to secure the continued backing of international creditors and prevent such a default on debt payments.
The latest tranche of aid is the most recent segment of a 110bn euro ($150bn) package of loans established by eurozone countries and the IMF to help Greece pay its huge debts.
In Athens, train, bus and taxi services were crippled, triggering kilometres-long traffic jams and stranding tourists at hotels in the ancient city centre for several hours.
One traffic police official told Reuters: "The situation is dramatic, all major streets are jammed."
Many flights were delayed or cancelled after air traffic controllers walked off the job for several hours in the afternoon.
Some teachers and civil servants also stopped work.
In addition to Thursday's strike, the main private sector union, the GSEE, has called for more industrial action next month to protest against the austerity measures.
Union president Yannis Panagopoulos said: "This is a policy we do not tolerate, we do not want. We are in continuous, total, permanent opposition to it."
Greek Finance Minister Evangelos Venizelos warned: "The situation is extremely critical and I could say dangerous. There is great nervousness in the eurozone, the European banking system and the world economy."
The tougher measures announced on Wednesday affected pensions, tax thresholds and civil servant posts.
Monthly pensions above a 1,200 euro ($1,600) threshold will be cut by 20% and those retiring below the age of 55 will see a 40% cut in pensions above a 1,000 euro threshold. The number of civil servants suspended on partial pay will rise by 50% to 30,000 by the end of the year.
And the threshold at which income tax becomes payable on annual salaries will drop from 8,000 to 5,000 euros.
Several newspapers on Thursday condemned the measures. The pro-government Ta Nea said pensioners and civil servants had been put on a "sacrificial altar".
The government has also come in for criticism from the business sector. Constantinos Michalos, head of the Athens chamber of commerce and industry, told state TV: "There is no compass, this government doesn't know where it's going."
He later told the BBC: "People are going to revolt for sure - how can you milk a cow when it hasn't been fed?"
Thousands of protesters, mostly members of a communist group, students and teachers, gathered outside parliament on Thursday afternoon. There was a large presence of riot police but the demonstration took place peacefully.
Retiree Efthymios Gardikiotis told Associated Press: "I'm 73 years old and I will start a war. The same way [the government] wants a war."
Fellow Athenian Ioassif Roussanidis said: "I believe these [new] measures they are taking are probably the worst yet. Other countries have also gone through these crises but they handled them differently."
However, not all saw the point in strikes.
One civil servant at the ministry of finance, Georgia Haloulou, told the BBC they would do more harm in the long run.
She said: "Strikes will get us nowhere. The government, any government, has to do the cutbacks because otherwise we won't be able to get the loan; if we don't get the loan, nobody is going to be paid."