Strikes swamp Greece in decisive crisis week

By Derek Gatopoulos

Associated Press

Published: Monday, Oct. 17 2011 10:20 a.m. MDT

New cars are seen parked during a strike by custom officials in the port of Piraeus, near Athens, Monday, Oct. 17, 2011. Strikes halted ferries to the Greek islands and left rotting trash piling up in Athens for the 16th straight day Monday, as unions fought back against more austerity cuts at the start of a crucial week for both Greece and the 17-nation eurozone.

Petros Giannakouris, Associated Press

ATHENS, Greece — Strikes halted ferries to the Greek islands Monday and left rotting trash piling up in Athens for the 16th straight day, as unions fought back against more austerity measures at the start of a crucial week for both Greece and the 17-nation eurozone.

The unions orchestrated a barrage of strikes, protests and sit-ins. Tax collectors and customs officers walked off the job, several hundred firefighters and police officers staged a central Athens protest in uniform, and protesting civil servants occupied the finance and labor ministry buildings in the Greek capital.

Greece faces a key vote on the new austerity measures Thursday, and other eurozone countries are rushing to find a comprehensive solution to Europe's escalating debt crisis in time for a Sunday summit in Brussels by European leaders.

Both the Greek vote and the debt plan are needed so Europe can avoid a loss of confidence in global markets that some fear would plunge the world economy back into a recession.

Parliament's finance committee on Monday approved the new austerity measures, which include pension cuts and across-the-board tax hikes, as well as pay and staff cuts in the civil service.

"The latest measures are the deathblow for our income, "the civil servants' union ADEDY said. "The government is destroying its central administration and cutting away the safety net for our citizens, while dramatic cuts in pay are driving workers into poverty and deprivation."

But Prime Minister George Papandreou said he was determined to see the latest reforms through because it would prove to international creditors that Greece was "seeking to make major changes." Greece has been kept solvent since May 2010 only with international bailout loans.

"This is the most critical week for Europe, and of course for Greece, with decisions that will determine the fate of the eurozone," he said at an emergency meeting with President Karolos Papoulias. "It will mean we can go to the (debt) negotiations ... with our heads held high and with a stronger negotiating position."

The Socialist government is facing mounting party dissent over a vote in parliament Thursday to pass a new punishing round of tax hikes and pay cuts agreed upon in exchange for international bailout loans.

One Socialist lawmaker, 50-year-old Thomas Robopoulos, resigned his seat in parliament Monday, calling the new round of austerity measures "unfair and anti-labor."

His resignation does not affect the government's four-seat majority in parliament as lawmakers there are replaced by party list and not by-elections.

Still, with its slim majority, the government is facing the prospect of an embarrassing defeat over a central part of the new legislation — its plans to strip Greek workers of decades-old labor rights.

The government, meanwhile, was considering using the army to help clear the mounds trash in Athens. Police said a private truck, commissioned by the government to replace striking garbage collectors, was attacked and set on fire Monday by dozens of unidentified men in an Athens suburb. The driver escaped unharmed.

Worse labor unrest was ahead: a 48-hour general strike looms for Wednesday and Thursday that will ground flights for two days, cripple public and many private services, even shut down essential services like gas stations and bakeries.

The dissent and fierce protests by Socialist-led unions are piling pressure on the Papandreou government as Greece awaits formal approval this week of its next rescue payout of €8 billion ($11 billion) from the International Monetary and eurozone countries, which are increasingly skeptical of Athens' ability to ever make its deficit-cutting targets.

Greece has admitted it will not meet its deficit-cutting targets this year and has promised tougher austerity in 2012 to compensate.

On Monday, the Greek Statistical Authority reported that the country's budget deficit was at €24.1 billion ($33.3 billion) — or 10.6 percent of gross domestic product — in 2010 and its national debt at €329.4 billion ($454.8 billion), or 144.9 percent of GDP. Both 2010 figures were worse than revised expectations.

European officials intend to have ready by the end of the week a comprehensive plan to fight the debt crisis with new tools. That is expected to include new agreements on lightening Greece's debt load, boosting the health of Europe's banks to withstand the debt turmoil and enhancing the impact of the eurozone bailout fund's lending.

German Finance Minister Wolfgang Schaeuble said private holders of Greek bonds would likely have to endure bigger voluntary losses than the 20 percent level set in a July agreement over a second bailout for Greece. That is considered crucial if Greece is to have a fighting chance of emerging from its massive debt hole.

But he later said not to expect a definitive solution to the financial crisis at Sunday's summit of EU leaders.

German Chancellor Angela Merkel's spokesman, Steffen Seibert, said Monday that all sides involved in negotiations over Greece's second bailout have agreed to keep the discussion of possible measures confidential.

AP writer David Rising in Berlin contributed.

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