Greek unions are planning more strikes and protests in reaction to a new austerity package widely expected to be announced today. It is thought that a package of austerity measures would be a condition for the activation of the 100+ billion euro financial aid package lined up by the Eurogroup and the International Monetary Fund. Representatives of the IMF and EU left Athens on Tuesday after a few days of consultations with the government.
Local media have reported a series of Drakonian measures said to be included in the package. Among them is the complete severance of Easter, summer and Christmas bonuses in the public sector, amounting to two extra salaries a year. The government already trimmed these by 30 percent in the last austerity package, announced in early March. Their complete removal would be a historic irony, as they, along with much of the welfare state, were introduced in the early 1980s by then prime minister Andreas Papandreou, father of current Prime Minister Yiorgos Papandreou.
There could be more public sector pain in a further reduction in above-salary benefits. These are awarded for rank, length of service, educational level and children, among other things, and can as much as double nominal salary. The government already trimmed benefits by 10 percent this year, giving rise to four one-day strikes in the civil service.
Also allegedly planned is the abolition of Easter, summer and Christmas pension bonuses in both the public and the private sectors, since the state underwrites pension funds in both.
A further hike in VAT could be on the cards, despite a 1-2 point rise earlier in the year that has now begun to come through in retail prices and utility bills. Indirect taxes, though unfair on the poor, are an attractive option for the government because Greeks are notorious evaders of direct taxation. Greek governments raise only about 2.5 billion euros a year through direct taxation on individual income, compared to tens of billions from VAT.
Labour reaction has been mixed. Union leaders, who discussed the measures with Papandreou today, described them in the darkest terms. “This is the most savage, unprovoked and unjust assault,” said civil servants’ union leader Spyros Papaspyros last week, adding that the measures would “render salaried employees, pensioners and the unemployed wretched.”
The head of the largest private sector union group, the General Confederation of Labour (GSEE), said its answer would be delivered “on the streets”.
But the head of the Greek Economic and Social Committee, a former head of GSEE, said the measures were tough but would have to be fought through.
Organised labour is polarizing opinion through what some see as its excesses. Last Wednesday, a group of communist party activists and passenger shipping unionists harassed passengers attempting to board their cruise ship, the Zenith, in Piraieus harbor. In response, the ship’s operator, Spanish-based Pullmantur cruises, announced it will withdraw the ship from Greek waters. The Association of Greek Tourism Enterprises estimated the loss at 10 million euros and 400 jobs this year. Tourism is Greece’s biggest industry, amounting to 20 percent of GDP.
Yet strikes are set to intensify over the short term. A number of labour groups went on strike on Mayday, and journalists are walking off the job next Wednesday.
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