Greece has a public debt of about $400 billion, more than the countrys gross domestic product. Its budget deficit is at least 13.6 percent of GDP. Standard and Poors rating agency has reduced Greek treasury bonds to junk status.
Finance Minister George Papaconstantinou said Greece will be in recession for the next few years, reported the New York Times.
Nearly 100,000 people marched in central Athens May 5, the day of a 24-hour general strike called by public and private sector unions.
Twice as many people are participating in todays strike as did in last months, said Kyriakos Zobolos, an airport cargo worker who was marching with his union contingent. People have been faced with austerity for a long time. Now they realize their sacrifices were all for nothing.
The strike paralyzed transport and public services, hospitals, and banks.
After the bulk of the demonstration had broken up, firebombs thrown into a bank branch resulted in the deaths of three workers trapped inside. The Bank Workers Federation of Greece called for a 24-hour strike in their memory. The government is now exploiting the deaths to shift discussion off the antilabor measures it is carrying out.
In presenting the austerity measures May 2, Papaconstantinou argued that the choice facing the nation was between collapse or salvation.
The measures cut, then freeze for three years, the wages of public sector workers, as well as eliminate their annual bonuses by the equivalent of about two months pay. All other benefits are being reduced by 8 percent. In Greece one-third of all workers are employed by the government.
Papaconstantinou also announced cuts to pension payments and a raise in the retirement age for all workers. There will be a second increase in the value-added tax to 23 percent from 21 percent, and a 10 percent tax increase on cigarettes, alcohol, and gasoline.
The new austerity measures aim to ensure that the ruling-class families in Greece, Germany, and France will continue to reap the massive profits from the bond holdings they consider their due.
German chancellor Angela Merkel, who initially resisted the loan plan, played a leading role in pushing through these measures by threatening not to contribute funds to the EU-IMF package if harsh austerity measures were not carried out.
Bobbis Misailides and Natasha Terlexis contributed to this article.
UK communist: Cant reform banks to be fair
Front page (for this issue) | Home | Text-version home