Strikes bring Greece to its knees

Public sector workers stage wave of walkouts after government unveils spending cuts to meet EU targets

The Greek government's emergency efforts to revive the country's ailing economy met with angry protests in Athens yesterday, as customs officials and tax collectors went on the first of an expected rash of rowdy strikes.

The two-day protest comes after the government enacted a brutal reform package in response to a disastrous economic picture in the eurozone's weakest economy. The absence of the customs workers was already making itself felt yesterday, as lines of trucks formed at the country's borders unable to bring imports into the country except perishable goods and pharmaceuticals. Fears arose that a fuel shortage would soon result.

Public sector workers are unhappy at what they see as excessive cuts announced this week, and claim they break the new socialist administration's campaign pledges. "We have already made sacrifices and will accept no more cuts," said Argyris Sakellaropoulos, the union leader of Greece's customs officials.

The industrial action will be followed by a 24-hour strike scheduled by civil servants next Wednesday, capped by another day of mass walkouts called by Greece's biggest trade union on 24 February.

The Prime Minister George Papandreou's planned reforms, announced earlier this week in a desperate attempt to slash the 12.7 per cent deficit to the EU limit of 3 per cent by 2012, have barely been better received in world markets. The Athens stock exchange dropped 1.5 per cent in afternoon trading yesterday, while markets on both sides of the Atlantic, concerned at Greece's debt struggles and similar problems in Portugal and Spain, followed suit.

Mr Papandreou's statement, nationally televised in an attempt to allay growing public concern, prescribed a host of belt-tightening measures, including a civil service pay freeze, higher retirement ages, and cuts in special stipends that make up a large part of civil servants' income. It was the Prime Minister's second appeal to the country in less than a week as part of a new drive to persuade people to accept the "painful" measures and accept that the country cannot afford strikes and blockades.

The measures were received with guarded optimism by the European Commission after pressure was put on the government to bring the deficit into line with the EU limit. But fears remain that the untested government of Mr Papandreou may have trouble implementing its reforms amid a wave of labour unrest.

Greece's recession-hit economy has already been hit by unrest from farmers, who last month blocked key highways, railways and border crossing, demanding more subsidies and higher prices.

The previous conservative government, replaced in October, faced a barrage of wildcat strikes after trying to tighten pension rules and raise taxes, and many hoped the new regime might be able to achieve the necessary savings.

Concern that Greece and other European nations may struggle to contain their deficits has pushed the euro down more than 7 per cent since November. A month later, Greece suffered a triple downgrade of its sovereign debt, setting off speculations of bankruptcy.

Socialists have begun accusing the ruling party of breaching campaign pledges ahead of its landslide victory last October. "The adoption of these measures raises suspicion that the government could carry out additional upsets ... when it had categorically denied it would do so," one leftist daily said.

EU and Greek officials have ruled out bailout assistance but the International Monetary Fund has said it was ready to help Greece.