Greeks Strike Over Cuts
Business + Economy

Greeks Strike Over Cuts

Greek workers went on strike against austerity measures on Friday, docking ships and halting public transport, hours after euro zone finance ministers said Athens needed to make more cuts to convince them to release a financial bailout.

The euro and shares fell on Friday, reflecting concern over a possible failure in the debt restructuring after the European Union and International Monetary Fund indicated that a hard-won Greek deal on spending cuts and wage cuts did not go far enough.

The EU and IMF are exasperated by a series of broken promises by Athens and weeks of disagreement over the terms of a 130 billion euro ($172 billion) bailout, with time running out to avoid a default.

Before they release more aid, Greece's financial backers have demanded parliamentary ratification of the new austerity package this weekend, the identification of a further 325 million euros of spending reductions by next Wednesday and a strong commitment from all parties to implement the reforms.

But it may be a demand too far. Many Greeks, already suffering from five consecutive years of recession, are increasingly angry about the measures, which are unlikely to ease an economy, where one in five is unemployed, shops close one after another and households are tightening their budget.

The central Athens Syntagma square, in front of parliament, echoed with loudspeaker calls to rally against the measures: "No to layoffs! No to salary cuts! No to pension cuts! Do not bow your heads! Resist!"

Strikers brought the metro and buses to a halt, and ships were docked in the country's main ports in a 48-hour general strike, not long after another nationwide action on Tuesday.

Hospital doctors and bank employees also walked off the job and teachers were set to join on Friday. Flights were not affected by the strike, an airport official said.


"The measures included in the new (EU/IMF) memorandum and which the three political leaders agreed with the government and the troika are the 'tombstone' of the Greek society," the civil servants' union ADEDY said in statement.

"It's time for the people to speak up."

ADEDY and its private sector sister GSEE represent about two million workers, or roughly half the country's workforce. They have staged repeated strikes since the country first resorted to a bailout from foreign lenders in 2010.

The two unions have called for protesters to rally in front of parliament. Turnout at protests has been relatively small over the past months and Friday's rally will be a test of the anger against the new austerity measures.

Greek ministers are scheduled to meet in a cabinet meeting at around 6 p.m. ET.

Facing elections as soon as April, Greece's party leaders have been loath to accept the lenders' tough conditions.

After days of delays, and under threat of a messy default that could force Greece out of the euro zone, they agreed on Thursday to cut the minimum wage by 22 percent as part of efforts to make the economy more competitive.

Two sources said the government was also promising spending cuts and tax rises worth 13 billion euros from 2012 to 2015, almost double the seven billion originally pledged.

Jean-Claude Juncker, who chairs the Eurogroup of finance ministers in the euro zone, urged Greece late on Thursday to act on their promises.

"In short, no disbursement before implementation," he told a news conference after six hours of talks in Brussels.

Germany's deputy finance minister, Steffen Kampeter, piled on the pressure on Friday, underlining the need for structural change in Greece - a comment echoed by European Commission President Jose Manuel Barroso visiting India.

"Obviously these political decisions are grim, but they are necessary because the alternative is giving them money without changes in behavior, which neither the German parliament nor other euro zone parliaments will approve," he told local television.

Some Greek newspapers seemed to support the demands.

"Greece's credibility is zero. That is why the troika (of officials from the EU, IMF and European Central Bank) is asking for written assurances and the voting of the implementation laws," financial daily Imerisia wrote in an editorial.

"Let us decide ... if we want to continue being part of the euro zone or if we wish to walk down a dark path."

(Additional reporting by Angeliki Koutantou, Lila Chotzoglou, and Stephen Brown)