Greek Austerity: New Measures 'Catastrophic' Say Protesters

Police stand guard as students and teachers march during a protest against austerity measures and education reform, in central Athens. Strikes swept across Greece on Thursday amid new budget cuts, with doubts growing that the government can implement new EU-IMF budget cuts needed to secure funds and avert default (photo: AFP)

Greek Austerity: New Measures 'Catastrophic' Say Protesters

Strikes bring Athens to a standstill as government announces further swingeing cuts to public sector jobs and pensions

Thousands of Greeks have poured on to the streets of Athens, furious at the prospect of further austerity in a country already reeling from previous bouts of belt-tightening.

As bus, tram, train and taxi drivers walked off the job, joining subway employees and state school teachers in a 24-hour work stoppage, unions vowed to step up their struggle against the cuts with a series of general strikes.

"We will wage war against the government and the troika for as long as it takes," said Yiannis Panagopoulos, who heads the confederation of Greek workers, the nation's congress of trades unions.

"These are policies that are literally bringing down whatever was left standing. They are unacceptable and totally catastrophic."

To make the point protesters spray-painted "they won't pass" across the entrance to the economy ministry.

George Papandreou's crisis-hit administration unveiled the cuts - the third wave in as many months - in a desperate effort to secure more rescue loans from its "troika" of lenders: the EU, International Monetary Fund and European Central Bank. Without the EUR8bn (PS7bn) cash injection Greek officials have acknowledged the deepening debt crisis means they will be unable to pay public sector wages and pensions from next month.

Aiming to further trim the bloated public sector, the new measures outlined include the suspension of 30,000 civil servants by the end of the year, a dramatic cut in pensions and a lowering of the tax threshold on salaries from EUR12,000 (PS10,500) to EUR5,000.

By reducing monthly pensions of more than EUR1,200 by 20% and almost halving the amount paid to recipients under the age of 55, the public sector will save around EUR1bn, according to officials.

"The situation is critical," said finance minister Evangelos Venizelos as he met the Greek president to outline measures that will supplement a fire sale of public assets, the closure of state-run entities, the deregulation of professions and mass layoffs in the public sector. "We have to do whatever is necessary to avoid following in the steps of Argentina."

But with recession biting hard and Greeks already hit by tax increases, price rises, wage cuts and pension reductions in a 20-month austerity drive that has seen the average household's income drop by an estimated 50%, the argument that the latest measures are the only way to meet the budget goals necessary for the country to avoid default has fallen on deaf ears. Plummeting living standards have led to a dramatic rise in poverty.

"The government doesn't have the mandate to pass such measures," said the leftwing leader Alexis Tsipras, in parliament. "They have stolen the mandate from the people." A series of missed targets has fueled popular anger.

The IMF has projected Greece's public debt to GDP ratio to be189% next year when it was expected to peak at 160%. By December Greece's unemployment is on course to hit 1 million - nearly a quarter of the working population.

At almost 10% the country's deficit is far in excess of the 7.4% international creditors had hoped for by the end of the year.

Ordinary Greeks are now increasingly convinced that austerity measures are making the plight of the country worse.

"The government is asking the impossible of us," said Thanassis Leventis, who heads the federation of Greek railway workers.

"All the indicators have got worse. Nothing has got better. Greek society cannot bear any more. We live in a constitutional democracy, we have rights. We will take to the streets because we have no choice."

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