Greece faces general strike, more cuts planned

By Elena Becatoros

Associated Press

Published: Tuesday, June 28 2011 2:10 a.m. MDT

Passengers sleep during a four-hour work stoppage by air traffic controllers at the Athens International Airport Tuesday, June 28, 2011. Workers across Greece walked off the job Tuesday at the start of a 48-hour general strike as lawmakers debate a new round of austerity reforms designed to win the country additional rescue loans needed to avoid bankruptcy.

Thanassis Stavrakis, Associated Press

ATHENS, Greece — Workers across Greece walked off the job Tuesday at the start of a 48-hour general strike as lawmakers debate a new round of austerity reforms, which must be passed if the country is to get crucial bailout funds.

More than 5,000 police were to guard Athens' city center, as thousands of protesters hold a rally outside Parliament, chanting anti-austerity slogans. Another demonstration is scheduled to start later in the morning.

Everyone from doctors and ambulance drivers to casino workers and even actors at a state-funded theater are set to join the two-day strike or hold work stoppages for several hours.

Hundreds of flights were canceled or rescheduled as air traffic controllers walked off the job for four hours from 8 a.m. Another walkout is expected in the evening.

There were further disruptions as public transport workers joined the strike, snarling traffic across the capital, while protesters blockaded the port of Piraeus.

Unions are angry at a new €28 billion ($40 billion) austerity program that would slap taxes on minimum wage earners and other struggling Greeks. The planned measures come on top of other spending cuts and tax hikes, which have contributed to the rise in the unemployment rate to over 16 percent.

The package and an additional implementation law must be passed in parliamentary votes Wednesday and Thursday so the European Union and the International Monetary Fund release the next installment of Greece's €110 billion ($156 billion) bailout loan.

Without the €12 billion installment, Greece faces the prospect next month of becoming the first eurozone country to default on its debts — a potentially disastrous event that could drag down European banks and affect other financially troubled European countries.

"The situation that the workers are undergoing is tragic and we are near poverty levels," said Spyros Linardopoulos, a protester with the PAME union at the Piraeus blockade. "The government has declared war and to this war we will answer back with war."

The planned measures have caused outrage even among lawmakers from the governing Socialists, and Prime Minister George Papandreou has struggled to contain an internal party revolt. Earlier this month, he reshuffled his cabinet in an attempt to get his party's support for this week's vote — the Socialists only have a 5 seat majority in the 300-member Parliament.

Speaking at the start of the three-day debate Monday night, Papandreou called on lawmakers to fulfill a "patriotic duty" by voting in favor of the new measures. Two of his own deputies have suggested they will not vote for the bill.

"I call on you to vote for survival, growth, justice, and a future for the citizens of this country," Papandreou said.

The debate began as word came that French banks are willing to defer Greek debt claims and ease pressure on Athens.

Greece remains frozen out of bond markets and is surviving on the €110 billion in promised bailout loans. But the initial plan had assumed that Greece would be able to return to the markets next year. As a result, it's become clear that the country will need more help, and Athens is negotiating for a second bailout, which Papandreou has said will be roughly the same size as the first.

Papandreou said he hoped the terms would be better than those for the first bailout.

"I call on Europe, for its part, to give Greece the time and the terms it needs to really pay off its debt, without strangling growth, and without strangling its citizens," he said.

Papandreou's new finance minister, Evangelos Venizelos, said the government acknowledged the new cuts were "unfair" and that he hoped negotiations over a second bailout would be concluded by the end of the summer.

"These measures will take us from running budget deficits to achieving primary surpluses," he said. "It's a difficult but necessary step."

Theodoros Pangalos, the outspoken deputy prime minister, criticized financial experts who have suggested Greece might be forced to abandon the euro and return to its old currency, the drachma.

"A return to the drachma would mean that the next day banks would be surrounded by people trying to get their money out. The army would have to use tanks to protect (the banks) because there wouldn't be enough police to do it," Pangalos said in a weekend interview with the Spanish daily El Mundo.

"There would be riots everywhere, shops would have empty shelves and people would be jumping out of windows ... It would also be disastrous for the entire economy of Europe."

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Derek Gatopoulos and APTN crews contributed.

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