May 4, 2010 / 8:36 AM / 9 years ago

Greek strikes test government austerity plans

* First test of new government austerity measures

* Poll shows over half of Greeks ready to take to streets

By George Georgiopoulos

ATHENS, May 4 (Reuters) - Greek public sector workers began a 48-hour nationwide strike on Tuesday that is a first test of the government’s ability to enact new austerity measures agreed with the EU and IMF in return for billions of euros in aid.

Government ministries, tax offices, schools, hospitals and public services were shutting down ahead of a midday rally of civil servants outside parliament organised by the country’s main public sector union ADEDY.

“We want an end to the freefall of our living standards,” said Spyros Papaspyros, the head of ADEDY, which represents about half a million workers. “I think this will be one of the biggest protests we’ve seen in the last decade.”

Private sector workers are due to join the walkout on Wednesday, the third joint strike since the beginning of the year, when worries about Greece’s swollen debt and deficit levels made the country a target of financial markets.

Ahead of the Tuesday rally, members of Greece’s communist party hung banners reading “Peoples of Europe — Rise Up” on the walls just below the Acropolis in central Athens.

Participation in demonstrations has been limited to a few tens of thousands so far, paling in comparison to the riots that paralysed Athens in December 2008 following the police killing of a teenager.

But public anger is expected to grow after Prime Minister George Papandreou’s socialist government unveiled draconian new budget cutting plans on Sunday that foresee major cuts in wages and pensions. [ID:nLDE64107I]

In exchange, Athens is to receive 110 billion euros ($146.5 billion) in support over three years, a package aimed at calming fears of a default and buying the country time to overhaul an economy that is uncompetitive and plagued by corruption.

PAY FREEZE, BONUS CUTS

An ALCO poll released on Friday, before the EU/IMF package was agreed, showed that more than one in two Greeks are prepared to take to the streets to fight the austerity plans.

Greek newspapers expressed concerns on Tuesday that average workers and pensioners were being forced to pay a heavy price for the sins of corrupt officials and tax evaders responsible for Greece’s dire financial state.

“It will take a lot of work to convince people that the bill will be paid by those who are responsible or those who can afford it but are not paying,” centre-right daily Eleftheros Typos said.

The government plans foresee a public sector pay freeze through 2013 and an end to treasured holiday bonuses for public sector workers earning over 3,000 euros per month.

Special allowances, which account for a substantial portion of civil servant incomes, are to be cut by a further 8 percent after being chopped by 12 percent in March. And pensions will be adjusted to reflect average pay over the full working life of Greek retirees rather than their final salary level.

In the private sector, the government plans to loosen rules which prevent companies from firing more than 2 percent of their workforces in a single month. For other stories, click [nLDE6351JT]

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