Greece announces more cuts as unions strike back

Greece announced yesterday further cuts but unions announced new strikes against the painful austerity measures being imposed.

Pensions above €1,200 per month will be cut, 30,000 state employees will be temporarily laid off and the revenue exemption on annual taxes will be reduced to €5,000, the government said in a statement.

The measures “should enable to Greece to meet its 2011 and 2012 targets...” it added.

Greece has been struggling to convince the European Union and International Monetary Fund that it can bring its tough economic overhaul programme back onto track despite delays and targets slipping due to a deeper-than-expected recession.

After conference calls with Finance Minister Evangelos Venizelos on Monday and Tuesday, EU and IMF auditors agreed to resume their review of Greek finances needed to unlock eight billion euros in rescue funding.

The audit had been suspended in early September, with sources citing lack of progress with reforms, placing in jeopardy the release of funds needed to prevent Athens running out of cash next month.Sweeping spending cuts and tax hikes have been enacted in Greece for nearly two years as the country struggles to apply a tough economic overhaul in return for bailout loans from the European Union and the International Monetary Fund.

The government also said decisions were taken on moving forward with structural reforms, in particular on removing labour market restrictions and speeding up the delayed privatisation programme.

The measures followed the announcement of a 48-hour general strike and clashes outside parliament between protesters and riot police, as anger mounts over a controversial property tax the government unveiled last week.

The main private sector union GSEE and the Adedy syndicate reacted by calling for strikes next month against the austerity measures.

“Civil servants will hold a strike on October 5 and both the public and private sector will strike on October 19,” a GSEE official said.

“If the ‘troika’ threatens Greek society with a marathon (of measures), it should know that our answer will be a marathon of struggle,” said GSEE chairman Yiannis Panagopoulos, using the term commonly employed to describe Greece’s three creditors, the EU, IMF and European Central Bank.

Public transport workers also voted to bring the capital to a standstill today, with the support of irate taxi owners opposing a liberalisation of their sector, while teachers and municipal workers will hold walkouts.

And air traffic controllers are also staging a four-hour stoppage, forcing airlines to scrap or reschedule flights.

The relentless belt-tightening has raised dissent within the ruling socialist party with backbenchers and even the previous economy minister voicing scepticism about plans to put surplus public workers on furlough.

“The end benefit will be minimal,” former economy minister Louka Katseli told Vima FM Radio.

“Staff on reserve will still burden the state through social insurance or unemployment benefits,” she said.