Strike hits Greece public services

A 24-hour anti-austerity strike by Greece’s largest labour unions crippled public services today, as the Socialist government prepared to begin a battle to push through last-ditch cost-cutting reforms which will extend beyond its own term in office.

The strike left state hospitals running on emergency staff, disrupted port traffic and public transport, and forced radio and television news programmes off the air. Flights, however, were operating normally after the air traffic controllers’ union called off its participation in the strike.

“They keep asking us to give more,” said Ilias Iliopoulos, general secretary of the civil servants’ union Adedy. “Now, again, they will cut our salaries and bonuses, from the little that we have left.”

The government needs to pass a new 2012-2015 austerity programme worth 28 billion euros (£24.7 billion)this month – or face being cut off from continued funding from a 110 billion euro (£96.9 billion) package of rescue loans from European countries and the International Monetary Fund.

To meet its commitments, Prime Minister George Papandreou’s Socialists’ abandoned a pledge not to impose new taxes and have drawn up a four-year privatisation programme worth 50 billion euros (£44 billion) – further fuelling protests against austerity by public utility employees and other affected groups.

Dozens of demonstrators who have been camped out in the capital’s main Syntagma Square since May 25 banged drums throughout the night, and were joined by several dozen more protesters to chant slogans outside Parliament early this morning.

Two major union-organised demonstrations through the centre of the city were to start after 10am (0700 GMT). Such demonstrations have often turned violent in the past.

The Syntagma Square protesters have also said they plan to block access to the legislative assembly before politicians begin to debate the next round of cuts at committee level this afternoon.

Some politicians from the governing party have publicly criticised the new cuts. One of them defected yesterday, reducing Mr Papandreou’s parliamentary majority to five in the 300-seat legislature. Another Socialist politician said he would vote against the Bill.

With its credit rating deep in junk status, Greece is being kept afloat by the EU and IMF bail-out, but will need additional support to cover financing gaps next year as high interest rates will prevent it from tapping the bond market next year, contrary to what the original bail-out agreement had predicted.

On Monday night, Standard & Poor’s slashed Greece’s rating from B to CCC, dropping it to the very bottom of the 131 states which have a sovereign debt rating. That suggests Greece’s creditors are less likely to get their money back than those of Pakistan, Ecuador or Jamaica.

It is an astonishing low for Greece. As recently as January 2009, the country still had a stellar A rating despite a hefty debt burden.

Punishing austerity measures have seen the Socialists’ popularity plummet in recent weeks. A weekend opinion poll gave the main opposition conservatives a four-point lead over their Socialist rivals – the first time the party has been ahead in surveys since 2009. The next general election is scheduled for October 2013.