Strike test for new Greek government

AP News
Posted: Nov 30, 2011 7:46 PM
Strike test for new Greek government

Greece's new coalition government promised rescue creditors it will impose additional "deep and broad reforms," as unions launched a general strike Thursday against the economic austerity.

The 24-hour strike is the first test of union opposition to Prime Minister Lucas Papademos' three-week-old government, and is set to halt most public services. Protest rallies are planned in central Athens to start after 11 a.m. (0900 GMT).

The protest will also halt ferries, disrupt public transport, close schools and leave state hospitals running with reduced staff. Airport traffic, however, is not likely to be affected.

Papademos wrote the leaders of the European Union, European Central Bank and IMF, promising to conclude a massive new bailout deal for Greece and impose tough cost-cutting measures needed to stop the country overspending.

"The government is determined to continue the process of fiscal consolidation and structural reform in order to secure sound public finances and improve the country's international competitiveness," he wrote in a letter, dated Tuesday and made public late Wednesday.

Backed by the country's main Socialist and conservative parties, Papademos now heads negotiations for the new debt deal, amid an escalating crisis in the eurozone that is threatening its largest economies and ultimately the single currency's existence.

The new deal for Greece, to receive euro130 billion ($174.43 billion) in more rescue loans and support for banks, also includes a voluntary write-down of debt held by private holders of Greek bonds.

On Tuesday, eurozone countries approved the release of a crucial rescue loan installment to Greece that will total euro8 billion ($10.73 billion) along with a portion covered by the IMF.

In return for the EU-IMF lifeline, new austerity measures impose job suspensions and pay cuts in the public sector and an emergency property tax that threatens to leave households without power if they delay payment.

"They are creating a situation that can no longer be tolerated, can no longer be endured. Unfortunately people are in a state somewhere between poverty and despair," Ilias Iliopoulos, deputy leader of the civil servants' union ADEDY told AP television.

"The measures are supposed to improve the country's financial situation, but the country is getting deeper into debt, unemployment is rising, and the recession _ unprecedented in recent times _ is worse than anywhere else in Europe. People are falling apart."

Papademos' letter was addressed to top EU and eurozone officials Herman Van Rompuy, Jose Manuel Barroso and Jean-Claude Juncker, was well as ECB president Mario Draghi and IMF Managing Director Christine Lagarde.

The new coalition government, formed midway through the Socialists' four-year term in office, is due to call early elections at the end of February.