Greek Unions Strike as Papandreou Pleads for Lawmaker Support

Tuesday, 28 Jun 2011 07:26 AM

 

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Greek unions shut down government services, public transport and disrupted flights as Prime Minister George Papandreou called on lawmakers to obey their “patriotic conscience” and back tougher austerity measures.

Unions began their fourth general strike of the year at midnight, protesting Papandreou’s five-year plan of budget cuts and asset sales. The 48-hour walkout will be accompanied by rallies and marches to Parliament in Athens today.

“Voting for the medium-term plan means we can close this chapter of uncertainty for the Greek people,” Papandreou told lawmakers at the start of a three-day debate late yesterday. “From the brink of catastrophe we are securing, colleagues, the great opportunity to change our country.”

Papandreou faces his second survival test in a week tomorrow when lawmakers vote on the package that’s needed before the cash-strapped nation can tap a fifth loan payment from last year’s 110 billion-euro ($157 billion) rescue. Failure to pass the government’s 78 billion-euro plan may lead to the euro area’s first sovereign default.

“I am fully aware of the reality, fully aware of the risks for the average Greek,” Finance Minister Evangelos Venizelos said in Parliament in the same debate, defending the planned tax increases and state asset sales. “We have to stabilize the situation. But we must first survive on a fiscal basis to be able to improve this situation.”

Vote Looms

With 155 votes in the 300-seat legislature, Papandreou needs to unite his lawmakers in two votes this week on budget cuts and asset sales. Two ruling-party lawmakers have said they may vote against the legislation, in part due to their opposition to plans to sell a stake in Public Power Corp. SA.

Workers at the former electricity monopoly have held rolling 48-hour strikes for the past week, leading to power cuts around the country.

Air traffic controllers will cease work for eight hours today and tomorrow, according to a statement on the union’s website, which has caused the cancellation of all flights into and out of the Athens International Airport, the country’s biggest, between 8 a.m. and midday and 6 p.m. and 10 p.m. today, according to an airport statement.

Aegean Airlines SA will reschedule 97 flights and cancel 26 today while Olympic Air will cancel and reschedule 52 flights.

Bus, Trolley Strike

Bus, trolley, and tram workers in Athens will join the strike, as will staff at Hellenic Railways Organization, Greece’s state-run rail company. Dockworkers, journalists, health-care and municipal workers will also participate.

Workers at the capital city’s subway called off plans to join the strike, keeping the service open to allow protesters to participate in rallies to be held outside the Parliament.

Papandreou, whose support has slid in opinion polls, has spent the past 15 days trying and failing to muster opposition backing for the package, while keeping his own party in line. He appointed a new finance minister to stem defections, survived a confidence vote and outlined 5.6 billion euros of additional budget measures.

On June 24, he won a pledge for a second bailout from European Union leaders, on the condition that he delivers domestic support for the retrenchment.

An accompanying law on the five-year plan which was submitted to Parliament on June 27 must also be approved by the deadline of June 30 before European Union finance ministers meet on July 3 to approve the release of the 12 billion-euro tranche of aid.

Greek government officials say they may not have money past mid-July to pay wages and pensions. The country needs to cover 6.6 billion euros of maturing bonds in August.

Recession Impact

Implementing more austerity measures threatens to deepen a three-year recession and complicate efforts to boost government revenue and has stoked discontent among Greeks.

The economy contracted 4.4 percent in 2010 and will shrink a further 3.8 percent this year, according to a report from EU and International Monetary Fund inspectors in June. The nation’s debt load will peak at 166 percent of gross domestic product next year, and is already the biggest in the euro region’s history.

Papandreou’s plan includes higher taxes on restaurants and bars, higher heating-oil taxes and lowering the tax-free threshold to 8,000 euros from 12,000 euros presently. Greek newspaper To Vima calculated the additional burden for an average Greek family of four at 2,795 euros a year, about the same as one month’s income.

© Copyright 2014 Bloomberg News. All rights reserved.

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