Public Sector Workers Strike Paralyzes Greece
Originally published on Wed October 5, 2011 5:28 pm
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It's MORNING EDITION from NPR News. I'm Lynn Neary. Steve Inskeep is away.
RENEE MONTAGNE, HOST:
And I'm Renee Montagne.
We're going to hear now about the continuing economic woes of Greece. It's one of the small European Union countries drowning in debt. Today it faces yet another protest. This time, a general strike by workers in the public sector furious about more cuts aimed at them. The pressure to shrink the government payroll is coming from international creditors.
NPR's Sylvia Poggioli joins us on the line from Athens. Good morning, Sylvia.
SYLVIA POGGIOLI BYLINE: Good morning, Renee.
MONTAGNE: So tell us about what this strike is meaning, or going to mean, for Greece.
BYLINE: Well, right now, today, Greece is going to come to a standstill. There's no public transport; buses, subways or trams. No taxis. And air traffic has been grounded at Greek airports, as air traffic controllers join the walkout. Newspapers and state-run TV news are also joining the strike.
And the walkout will harm, in particular, Greek tourism which is the country's major industry. Travelers were packing ferries and boats yesterday and foreign visitors were scrambling to find seats on flights out of the country over the next few days.
Here, it's unusually quiet in Athens because there's much less traffic than we're used to seeing and hearing. And protest demonstrations are scheduled throughout the day.
MONTAGNE: Now, Greece has faced a number of austerity measures. What are the specific austerity measures that triggered this particular strike?
BYLINE: Well, already public sector workers have had their wages slashed 20 percent and bonuses eliminated, pensions have been cut. All Greeks have been hit with several new emergency income taxes and a new property tax. And now the government plans to suspend 30,000 civil servants. But it won't be easy, it has to find a legal way to do it because public-sector employees enjoy constitutional protections.
In the late 1800s, Greek politicians hired and fired civil servants at will whenever there was a new government. That ended in 1911 when the constitution was changed. Now the government is breaking a 100-year-old taboo and trying to take job security away from the public sector, which employs one-fifth of the Greek workforce.
MONTAGNE: And earlier this week, the Greek government announced something nobody wanted to hear. And that was that it would not meet its targets for cutting the deficit next year. That had European banks holding Greek debt worried. It sounds like a possible default is more and more likely.
BYLINE: Well, it's being talked about more and more openly here. But the problem is how to manage what's being called an orderly default. The issue was discussed yesterday, in a phone call between the Greek Prime Minister George Papandreou and German Chancellor Angela Merkel. And the Deputy Chancellor of Germany Philip Rosler is slated to come to Athens - next few days. The German media say the visit is aimed at providing the German plan for Greece's default. But nobody knows what that means.
An agreement that was reached in July, between Greece and international lenders under which banks holding Greek debt would agree to a 21 percent haircut or loss, is now considered no longer viable because the Greek recession is worse than expected. And therefore, the debt is growing. Many Greek analysts say they haircut should be at least 50 percent. But Germany, many of whose banks are holding much of the debt, really opposes that.
And then another worry some development in the eurozone crisis, Moody's lowered its rating on Italy's bonds yesterday by three notches. And analysts say this makes it really much more urgent for European leaders to stop dithering and try to really work on solving this crisis.
MONTAGNE: Although, Sylvia, these strikes can only be hurting the economy more. And with all the social unrest, how can the Greek government meet international lenders' demands?
BYLINE: Well, you know, the Finance Minister Evangelos Venizelos has repeatedly assured Greece's European partners that they will fulfill their obligations. But Greek media report that even Prime Minister Papandreou, who's accused here of bowing too much to international pressure, is exasperated. After inspectors called for the elimination of the minimum wage and collective contracts, Papandreou reportedly exploded and told his party loyalists: We are not Bangladesh - meaning Greece is not an underdeveloped country.
There are also rumors that Papandreou wants to throw in the towel and resign, although the government strongly denied that. But the Greek media are speculating that international lenders are calling the shots here, and they have no intention of allowing this government to fall.
MONTAGNE: NPR's Sylvia Poggioli speaking from Athens, thanks very much.
BYLINE: Thank you, Renee. Transcript provided by NPR, Copyright NPR.