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Greece unrest: Strike to continue amid austerity vote

 

Greece is braced for a second day of a general strike and mass protests as parliament takes a final vote on tough new austerity measures.

Protesters are gathering outside parliament in Athens, a day after 100,000 people marched against the cuts and police clashed with demonstrators.

The measures, including tax hikes and pay cuts, are needed to convince the EU and IMF to continue bailout loans.

Greece is saddled with a huge public debt and an economy in deep recession.

The 48-hour general strike is due to continue on Thursday with workers in virtually every sector of the economy participating.

Air traffic controllers went back to work after a 12-hour stoppage on Wednesday, allowing international and domestic flights to resume.

But civil servants, shopkeepers, dock workers, taxi drivers, doctors, lawyers, teachers, construction workers and others were due to continue the industrial action.

 

Latest Planned Austerity Measures

  • New pay and promotion system covering all 700,000 civil servants
  • Further cuts in public sector wages and many bonuses scrapped
  • Some 30,000 public sector workers suspended, wages cut to 60% and face lay off after a year
  • Wage bargaining suspended
  • Monthly pensions above 1,000 euros to be cut 20% above that threshold
  • Other cuts in pensions and lump-sum retirement pay
  • Tax-free threshold lowered to 5,000 euros a year from 8,00

Parliament is expected to approve the articles of an austerity bill after giving it preliminary approval in a first vote late on Wednesday by a margin of 154-141 of the 300 deputies.

‘Desperation and bitterness’

Protesters have said they will rally again on Syntagma Square in front of the parliament while the vote takes place.

The bill includes plans for further cuts to pensions and salaries and temporary lay-offs of 30,000 public sector workers.

Some of Prime Minister George Papandreou’s ruling socialist party deputies have threatened not to vote for some of the bill’s articles.

With Greece unable to borrow long term on international bond markets to finance its debt, the EU and IMF have stepped in with two bailout packages.

But they have demanded tough action to cut the deficit, which has angered many in Greece who say the medicine is killing the patient.

“We just can’t take it any more. There is desperation, anger and bitterness,” Athens area union official Nikos Anastasopoulos told Associated Press news agency.

Finance Minister Evangelos Venizelos described the choice as between a “difficult situation and a catastrophe”.

“We have to explain to all these indignant people who see their lives changing that what the country is experiencing is not the worst stage of the crisis,” he said.

“It is an anguished and necessary effort to avoid the ultimate, deepest and harshest level of the crisis.”

Graphic

Greek haircut

There are fears that if the Greek government defaults on its debts it will set off a chain reaction that could engulf banks and other highly-indebted eurozone nations.

But the government is struggling to convince lenders that it is cutting effectively enough. Greece says it needs the next 8bn euros ($11bn; £7bn) of the first bailout agreed to last year or it will soon be unable to pay its bills.

The details of the second rescue plan have yet to be finalised. Banks have agreed to take a 21% loss, or “haircut”, on their loans to Greece but there is growing pressure for them to accept higher losses.

European leaders and global finance chiefs are trying to work out a broader plan to tackle the eurozone’s debt crisis ahead of a weekend summit in Brussels.

French President Nicolas Sarkozy flew to Germany late on Wednesday to meet German Chancellor Angela Merkel and senior officials from the European Central Bank and IMF.

 

Neither leader gave any details about what had been discussed.

The two have disagreed about how Europe’s bailout fund, the European Financial Stability Facility (EFSF), can be leveraged from its current 440bn euros to a much higher value in order to bail out banks and struggling countries such as Italy and Spain, if needed.

Source: BBC

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