Strike shuts down Greek state sector

Greece’s state sector shut down today as civil servants walked off the job in a 24-hour strike, demanding the government take back stringent austerity measures designed to pull the country out of a debt crisis.

Tax offices, municipalities, schools and universities closed, while state-run hospitals function on emergency staff as doctors walked off the job for the day.

All planes flying to and from Greece will be grounded for four hours this afternoon as air traffic controllers join the protests. Other flights face disruption throughout the day, and Greece’s two main airlines, Olympic Air and Aegean, cancelled or changed the times of dozens of flights because of the strike.

Greece narrowly avoided defaulting on its debts in May after the International Monetary Fund and other European Union countries using the euro granted it rescue loans under a three-year, €110bn package. In return, the government has imposed austerity measures that included trimming pensions, cutting civil servants’ salaries and increasing taxes.

Unions and many businesses have complained that the measures are stifling the economy, leading to layoffs and the closure of hundreds of small businesses squeezed between higher taxes and consumers’ reduced purchasing abilities.

“Every day that goes by, it becomes clear that this policy by the government, the IMF and the EU, which leads workers and society to poverty and misery, is also a dead end for the economy,” the main civil servants’ union, ADEDY, said in its call for a strike.

The government predicts in its 2011 draft budget unveiled this week that unemployment will jump from this year’s projected 11.6% to 14.5% in 2011 and 15% the following year.

Unions have carried out a series of strikes and demonstrations since the start of the year against the austerity plan.

The government insists it has no choice but to implement the measures, which aim to overhaul the country’s ailing economy and have also included reforms to Greece’s fractured and ailing pension system.

Civil servants will hold a protest rally and demonstration in central Athens later today, while a communist party-backed union is organising a separate demonstration in the capital.

The government has pledged to reduce its budget deficit, from the 2009 figure of 13.6% of gross domestic product to 7% by the end of next year – lower than the IMF and EU target of 7.8% required under the rescue package.

The EU’s statistics agency is expected to revise the 2009 deficit figure upwards later this month, but finance minister George Papaconstantinou has said any revision will not have a major impact on this year’s budget gap and that the government will still meet its deficit reduction targets.

Mr Papaconstantinou is in New York today to meet international investors before heading to Washington for an IMF meeting tomorrow.