Greek Unions Stage Walkouts After New Budget Cuts
Athens. Greek unions on Wednesday staged walkouts as part of Europe-wide anti-austerity demonstrations, hours after parliament approved fresh budget cuts linked to a new eurozone bailout.
The main labor groups, private-sector GSEE and public-sector ADEDY, began a nationwide three-hour work stoppage from midday ahead of a demonstration in central Athens in the evening.
The mobilization is part of a day of action by European labor organizations against austerity measures enacted in Greece and other struggling eurozone economies to address a debt crisis plaguing the single currency area.
“Unions in Greece will once more unite their voice with those in Europe against neo-liberal policies, demanding an equitable and fairer Europe,” GSEE and ADEDY said.
Municipal workers were also occupying town halls around the country for the duration of the walkout, their union said.
Separately, doctors are holding a one-day strike against health spending cuts included in a new austerity bill before parliament on Wednesday.
Greece’s official creditors, the European Union and the International Monetary Fund, have demanded additional budget cuts to address deficit slippage before releasing a new bailout of 130 billion euros ($175 billion).
The latest rescue, after a 110-billion-euro EU-IMF loan in 2010, is tied to a massive debt writedown with private creditors designed to reduce Greece’s 350-billion-euro debt by 107 billion.
Prime Minister Lucas Papademos is scheduled to see European Commission chief Jose Manuel Barroso in Brussels later on Wednesday and will attend a Eurogroup meeting of finance ministers on Thursday to discuss the Greek measures.
Papademos’ coalition government late on Tuesday secured passage of a bill containing 3.2 billion euros in spending cuts, including new pension reductions.
Tuesday’s bill includes 12-percent cuts in civil servant pensions of more than 1,300 euros and reductions of between 10 and 20 percent in complementary pensions of more than 200 euros.
The latest legislation also foresees a 10-percent cut in the salaries of senior municipal officials and a merger of state research organizations.
Civil service pensioners have already sustained a 10-percent cut in payments under measures adopted from 2010 in return for a previous EU-IMF bailout worth 110 billion euros.
The vote on Tuesday came after ratings agency Standard & Poor’s (S&P) declared Greece in “selective default” owing to a proposed debt swap with private banks, a move that forced the European Central Bank to suspend Greek bonds as acceptable collateral for ECB loans.
The rating was lowered from S&P’s already junk-level “CC” grade for Greece, which has been seeking to avoid an outright default on its massive debt by negotiating a “voluntary” debt exchange with creditors.
The bond swap was launched Friday and is scheduled to be completed on March 12, according to Greece’s finance ministry.
At issue is whether the debt swap can be deemed ‘voluntary’ if just two-thirds of creditors sign up.
If it cannot, then creditors could invoke credit default swaps (CDS), which are insurance claims against losses on the bonds and which could possibly cause the entire Greek debt deal to unravel.
Equally importantly, Athens must redeem a three-year bond worth nearly 15 billion euros on March 20, which it cannot do if the exchange fails.
The International Swaps and Derivatives Association, an organization representing over 815 market institutions, is expected to say Wednesday whether the Greek debt cut constitutes a credit event that would trigger the CDS.