Public transport grinds to halt in Greek capital

AP News
Posted: Sep 22, 2011 8:14 AM
Public transport grinds to halt in Greek capital

Austerity-weary Greeks lashed out against more tax hikes and pension cuts with a new round of strikes Thursday, with public transport workers, taxi drivers, teachers and air traffic controllers walking off the job.

The strikes come a day after the government announced yet another round of spending cuts, including plans to suspend 30,000 civil servants as it scrambles to keep international bailout payments flowing and soothe global market fears that Greece will default.

Without continued payments from a euro110 billion ($150 billion) program of rescue loans from eurozone countries and the International Monetary Fund, the heavily indebted eurozone member will run out of cash by mid-October.

Athens has lagged behind savings and revenue targets set in its bailout agreement, angering international debt inspectors who threatened to halt the loans _ as the country heads for a fourth year of recession with rising unemployment levels. The inspectors are due back in Athens next week to complete a review on whether Greece has done enough to be granted the next euro8 billion installment of the bailout loans.

"The situation is extremely critical, I would say dangerous," Finance Minister Evangelos Venizelos told the country's president, Karolos Papoulias, during a meeting to brief him on the latest developments. "There is a sense of nervousness among the larger eurozone members ... that is affecting us."

Venizelos, who heads to Washington Friday to attend the annual International Monetary Fund meeting and meet with IMF head Christine Lagarde, said Greece was also being affected by problems in other eurozone countries.

"Unfortunately the eurozone at this moment falls short of the political and institutional level required" to deal with the crisis, he said.

But he also stressed it was up to Greeks to pull themselves out of the crisis.

"If we want to save the country ... we must keep our heads down and work," he said. "Because the miracle needed to save the country is in our hands. What is needed is work, work, work."

With all forms of public transport, including the metro, buses, trams, trains and taxis on strike on Thursday, Athenians struggled through traffic-clogged streets to make their way to work on what has been designated World Carfree Day. Air traffic controllers walked off the job for three hours in the afternoon, forcing airlines to cancel or reschedule dozens of international and domestic flights. Schoolteachers were also on strike for the day, and students planned a demonstration in central Athens in the early afternoon.

"We've already had one round of firings, and now they will have another," Yiannis Vlachos, head of a railway workers' union in northern Greece, said during a demonstration in Athens. "This has got to a critical point for our operations, since we cannot make the slightest compromise for passenger safety."

Under intense pressure to meet fiscal targets, the government on Wednesday said it would cut monthly pensions by 20 percent above a euro1,200 ($1,636) threshold, while retirees aged under 55 will lose 40 percent of their pensions above the sum of euro1,000.

The tax-free annual income limit will be cut to euro5,000 ($6,818) from euro8,000 ($10,908) as of this year, while the number of civil servants to be suspended on partial pay will rise to 30,000 by the end of this year, from 20,000 planned initially. After a year of forced idleness on 60 percent of their base salary, these workers will either be shifted to other state jobs or fired _ despite having been hired with a lifetime job guarantee.

The public sector employs about 780,000 people in the country of 11 million, and Greece's creditors have repeatedly urged cuts.

The new measures come after repeated rounds of tax hikes and cuts to public sector salaries and pensions which the government began to introduce last year in order to secure its rescue funding from the bailout program. A new property tax was announced earlier this month in an effort to plug a budget gap.

But the measures have not had the results the government or its international creditors had originally hoped for, with the country mired in a deep recession and struggling to meet its deficit-reducing targets. In July, European leaders agreed to extend a second, euro109 billion bailout, although some details of that program remain to be worked out.

According to figures released Thursday, this year's budget deficit through August widened by 22.1 percent compared to the same period last year, to reach euro18.08 billion. This was slightly below the target of euro18.97 billion set out earlier this year.

Unions have responded to austerity measures with repeated strikes and demonstrations, many of which have turned violent. Civil servants go on strike on Oct. 5, while a nationwide general strike is set for Oct. 19.


Derek Gatopoulos in Athens contributed.