Bonds News

UPDATE 3-Greek farmers end blockade in government victory

* Greek government wins first victory against protesters

* Farmers lift last blockade at border crossing

* Customs staff begin strike, tax staff cancel action

(Adds tax officials cancelling Feb. 17 walk-out)

By Renee Maltezou

ATHENS, Feb 16 (Reuters) - Greece’s government won a first victory over unions protesting against austerity measures on Tuesday when farmers abandoned their last blockade empty-handed.

Farmers ended a 30-day protest despite the Socialist government’s refusal to give them extra handouts as it struggles to cut a huge budget deficit and reduce public debt, which will be the euro zone’s highest as a share of output this year.

“There is no doubt this is a victory for the government,” said Costas Panagopoulos, head of ALCO polling agency. “This could mean that it can now adopt a tougher stance towards other unions, but also shows it is determined to implement its plan.”

In a further sign of union climbdown in the face of government resolve, Greece’s tax officials cancelled plans for a 24-hour strike on Wednesday to protest deep cuts in allowances.

“The government seems determined to push through its measures, so we don’t see we can gain anything from another strike,” said Yannis Grivas, president of the tax official’s labour union, which had staged two 24-hour strikes earlier this month.

Farmers had blocked roads and border crossings across the country since mid-January, demanding more subsidies and higher prices for produce, and ignoring appeals by businesses and complaints from neighbouring EU-member Bulgaria.

But the protest dwindled after the government said Greece had no money to spare as it struggles to pull out of a financial crisis that has sent shockwaves across the euro zone.

“We are ending our protests ... the border crossing with Bulgaria is open,” said Giorgos Kasapoglou, a farmers’ representative.

“We understand the country is facing a crisis. They told us there is no money. We feel it’s unfair but we agreed on some points and that’s why we decided to leave.”

Deputy Agriculture Minister Michalis Karhimakis said the farmers had shown common sense.

“Farmers, realising the conditions and the existing difficulties, have stood up to the social responsibility that they share,” Karhimakis said. “We are open to a dialogue.”

The government faces more labour action next week with the two biggest unions ADEDY and GSEE on strike on Feb. 24.

The unions, which together group half of Greece’s 5-million workforce, say the poorest will suffer from a government package designed to bring down the budget deficit from 12.7 percent of GDP last year to under 3 percent in 2012.

On Tuesday, customs offices shut down as staff began a 3-day walk-out to protest against planned cuts in their income.

Opinion polls show most of Greece’s 11 million population back the government.