by Keith Richmond
Trade unions in Greece began a fresh wave of industrial action this week to protest against plans by the Socialist government to cut public expenditure.
Under pressure from the European Union, and the financial markets, Prime Minister George Papandreou announced his intention to tackle the country’s huge budget deficit by freezing public sector recruitment, raising the retirement age and putting up petrol prices to raise more revenue.
But workers in the public sector are furious that they are being asked to pay the price for the mistakes of the bankers and brokers.
Anargyros Sakellaropoulos, leader of customs officers who walked out for three days, said: “Although we contribute up to 40 per cent of state revenue and our working conditions are hard, the government wants to reduce our salary and take away our tax breaks.”
The problems of Greece – and of Portugal, Ireland and Spain, where the government of José Luis Rodriguez Zapatero announced a 50 billion euro austerity package at the end of last month – have pushed the euro to a nine-month low and European finance ministers said on Monday that more cuts may be needed if those just announced do not reduce the deficit.
The mood was summed up by Rainer Brüderle, the German Economics Minister, who said: “I don’t think a bailout is the right way because German and French taxpayers cannot pay for Greece.”
When Mr Papandreou’s Socialist Party won a resounding victory over the conservative New Democracy Party in last October’s snap election, it inherited a hidden financial crisis. The public deficit, at 12.7 per cent of gross domestic prodict, was twice as big as everyone thought.
