Greek tax inspectors announce strike as austerity protests

Reuters News
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Posted: Oct 12, 2011 6:13 AM
Greek tax inspectors announce strike as austerity protests

By Harry Papachristou

ATHENS (Reuters) - Greek tax inspectors will go on strike next week to protest against planned wage and pension cuts, threatening more disruption to revenue collection efforts that are already falling behind the tough budget targets imposed by international lenders.

With much of Greece expected to be shut down by a general strike on October 19, finance ministry officials have called a two-week stoppage from October 17 while tax offices will remain closed on October 17-20 and customs officials will stay away from their desks on October 18-23.

The walkouts are not only expected to disrupt tax payments. They might also block statistics releases and even fuel supplies, since petrol deliveries from refiners to tank stations usually require customs clearance.

"This law will drastically cut our wages and hurt our pensions," the POE-DOY union, which represents tax officials, said in a statement.

Athens has promised tough new civil service wage cuts to convince the European Union and International Monetary Fund that it will meet its budget deficit targets of 8.5 percent of gross domestic product this year and 6.8 percent in the next.

But the strike underlines the risks to a tax collection drive demanded by the EU and IMF inspectors as workers who will themselves suffer from the austerity measures resist implementing the new laws.

Disgruntled electricity workers have already threatened to boycott a planned property tax, designed to be collected through electricity bills as a means of bypassing the notoriously inefficient tax authority.

On Wednesday, workers in the Greek archaeological service, responsible for running sites such as the Acropolis in Athens which help attract much-needed tourist revenues to Greece, also went on strike. Doctors and nurses and teachers were planning separate demonstrations.

"We'll continue with labor action and occupations next week when the general strike takes place," said Despina Spanou, a senior leader of the ADEDY union, which represents half a million public sector workers.

"We expect it to be the biggest walkout so far, an answer to this austerity bill that rips us off. We cannot live like this," she told Reuters.

Public sector workers have already lost a fifth of their salaries since the start of the crisis. Spanou said the new bill will further reduce wages by 20 percent on average.

"It's not just salary cuts. It's a combination of measures that hurt civil servants such as the unified wage scale or the labor reserve. I am an example of the pain they feel. I've already lost 70 percent of my 2009 salary," she said.

DEFICIT WIDENS

With Greece trapped in deep recession and fighting to control a public debt mountain expected to reach 162 percent of GDP this year, there has been growing doubt over its ability to stave off a debt default.

Parliament is debating a sweeping package of measures, ranging from wage and pension cuts, tax hikes and large scale public sector layoffs. Finance Minister Evangelos Venizelos said the measures had to be approved in time for an EU leaders' summit on October 23.

"This law needs to be approved before the EU summit so that the PM can stand up and argue that Greece is fulfilling its obligations," Venizelos told lawmakers at a reading of the legislation in parliament on Wednesday.

The government has already admitted it will miss its 2011 deficit target and Venizelos has warned that if citizens fail to back new tax measures, the 2011 budget deficit could reach 9 percent of GDP, even higher than the new 8.5 percent goal.

On Tuesday, officials from the so-called EU-IMF "troika" noted that Greece would miss its 2011 fiscal targets and needed to take additional steps to get back on track to meet targets beyond 2012.

But the austerity measures imposed so far by Prime Minister George Papandreou's center-left government have failed to make visible headway in solving the crisis.

On Wednesday, data showed Greece's central government budget deficit during the first nine months widened 15 percent year-on-year to 19.2 billion euros as measures including a hike on sales tax in restaurants and a one-off income tax surcharge failed to boost overall tax revenues.

The finance ministry said the shortfall was mainly due to a deeper-than-expected recession, which has been exacerbated by the austerity measures.

The slump not only hurt revenues but also lifted spending, as the government increased payments to social security organizations, whose receipts are drying up as businesses and workers reduce contributions.

(Additional reporting by Renee Maltezou; writing by James Mackenzie; editing by Angus MacSwan)