Hundreds of thousands of Greeks are walking off their jobs at
airports, schools, hospitals and even the Acropolis to protest
Prime Minister George Papandreou’s 6.6 billion-euro ($8.7 billion)
austerity plan, challenging a government seeking European bailout
funds to stave off default.
Today’s 24-hour strike, the first this year that will shut the
Athens International Airport for a full day, takes
place after European Union ministers signaled they may renegotiate
terms of Greece’s latest rescue, sending the nation’s stocks down
the most in 17 months.
The country’s largest public-sector union, known as ADEDY and representing at least 400,000 state
workers, called the walkout and a march on parliament to protest
plans to put 30,000 public workers on reduced pay, raise property
taxes and cut pensions and wages. The demonstration defies calls by
the government to show unity in the struggle to avert a
default.
“We are at the worst circumstances under the worst conditions,”
Finance Minister Evangelos Venizelos said at a news conference in
Athens yesterday. “We are dependent on the aid and loans of our
institutional partners. That is the situation of the country. And
we must make superhuman efforts to win this wager of history.”
The government is dependent on outside financing as the economy
contracts and the unemployment rate stands at more than double
Germany’s. The Greek state, which employs about
750,000, carries a debt load that will reach 356.5 billion euros in
2011, or the equivalent of 161.8 percent of gross domestic product,
the highest in the EU and three times the ratio of Poland.
The strike, which forced cancellation of flights into and out of
the Athens International Airport and closed schools,
followed a decision by euro area finance ministers to delay the
release of the next 8 billion-euro loan installment under a 110
billion euro bailout approved in May 2010 until after Oct. 13. The
government has enough cash to operate until mid-November, Venizelos
said.
Greece’s 10-year bonds fell yesterday, pushing the yield up 50
basis points, or 0.50 percentage point, to 23.1 percent, more than
double the rate on July 21, generic pricing for euro- denominated
government securities shows. Greece’s
4.59 percent bond due in 2016 is trading at 35.5 cents on the euro
for a yield of 35 percent, down from a price of 64 cents on July
22.
The nation’s ASE stock index lost 6.3 percent yesterday, the
most since May 2010, led by a 15 percent slump in National Bank of Greece SA. (ETE)
European equities dropped for a third day, the longest-losing
streak in four weeks, as EU policy makers signaled private
investors may need to take on bigger losses than earlier estimated
as part of Greece’s bailout.
Violence during strikes in June caused 800,000 euros in damage
to state property in Athens over two days as Papandreou battled for
political survival in parliament.
The 59-year-old premier then won a confidence vote and backing
for a new five-year package of budget cuts and state asset sales to
secure further international aid by stemming defections from
members of his Pasok party.
Venizelos introduced measures to plug the budget gap for 2011
and 2012, including a property tax approved by parliament on Sept.
27 and further cuts to pensions and wages for state workers, after
inspectors from the International Monetary Fund and EU halted a review
of Greece on Sept. 1.
While strikes and protests are common in Greece, the timing of
the latest confrontation may cause investors to take notice, said
Antonio Garcia Pascual, the chief southern European economist at
Barclays Capital in London.
“It’s important to understand the degree of participation in
these strikes,” he said in a telephone interview yesterday. “If
it’s a massive demonstration with really large numbers, then surely
investors will take note of that.”
Air traffic controllers and employees at the Hellenic Civil Aviation Authority will cease work
for 24 hours today, the first all-day work stoppage for aviation
workers this year. Aegean Airlines SA (AEGN) canceled
all its flights and Olympic Air axed 89 flights, according to an
e-mailed statement from both Athens- based carriers. Schools,
archaeological sites and museums also are closed.
“We have workers who have had their wages cut by 40 percent and
with the new measures it will surpass 50 percent,” ADEDY Chairman
Costas Tsikrikas said by phone from Athens. “These measures, and
all the measures that have been passed so far, are putting the
heaviest weight on workers and pensioners, not on those who earn
the most and have sent their money outside Greece to foreign
banks.”
The General Confederation of Labor, or GSEE, the
country’s largest private sector union that represents workers at
state- run companies and utilities, plan to participate in the
walkout and called a general strike for Oct. 19.
Greece’s average unemployment rate is expected to climb to 16.4
percent next year from 15.2 percent in 2011, according to ministry
forecasts. Germany’s jobless rate was 6.9 percent in September. The
economy contracted 4.5 percent in 2010 and will shrink 5.5 percent
this year, Finance Ministry forecasts
show.
“We have taken decisions as a government and as a parliament but
as a society we have not taken a clear decision,” Venizelos said
yesterday. “Unfortunately our society, our country, is hostage to
great contradictions.”
Employees at Hellenic Railways Organization, Greece’s
state-run rail company, and the suburban rail network surrounding
Athens will also take part. Dockworkers, journalists, health-care
and municipal workers plan to join the strike.
Public transit employees are working today in order to help
carry protesters to central Athens for midday demonstrations and
marches to parliament. Transit employees have held a series of
24-hour strikes and work stoppages since Sept. 2 to protest
involuntary transfers and wage cuts that were part of an overhaul
of the public transit industry adopted last year by Greece’s
parliament.
Europe’s financial leaders are fighting on multiple
fronts, trying to repair Greece’s economy while insulating Italy
and Spain and shoring up banks that the IMF says face as
much as 300 billion euros in credit risks.
Ministers are considering reshaping a July 21 agreement that
foresaw investors contributing 50 billion euros to a second rescue
package totaling 159 billion euros. The original accord calls for
debt exchanges and rollovers, with private investors facing losses
of 21 percent, according to the International Institute of
Finance.
from bloomberg