Greeks Walk Off Job to Protest Overhaul to Pensions, Labor Laws
By Maria Petrakis and Natalie Weeks
Jun 29, 2010
More than 9,000 protesters marched through Athens today as Greek unions staged their fifth general strike of the year to challenge government plans to cut pension benefits and loosen labor laws.
The walkout halted state services including public transport and tax offices and disrupted some hospitals. The 24- hour stoppage hit ferry lines at Piraeus, Greece’s largest port, as the Panhellenic Union of Merchant Marine Engineers demanded changes to “anti-social measures.”
“We are faced with almost the total destruction of Greece’s social security and labor system,” Spyros Papaspyrou, chairman of ADEDY union for civil servants, said by telephone before the march. “We remain committed to this struggle.”
Greece is in the midst of its biggest upheaval since joining the euro nine years ago after being forced to take action to avoid a debt default. Reforms to pensions and the way workers are hired and fired are required by the European Union and International Monetary Fund in return for the 110 billion euros ($135 billion) of emergency loans agreed in May.
About 1,000 police officers were on duty in Athens to monitor the marches, though no incidents had been reported, a police spokeswoman said.
The backlash against austerity measures in Greece has been evident all year. Three people were killed on May 5 after demonstrators set fire to a bank in Athens as protests and strikes became a daily event in the country.
A day later in parliament, three of Prime Minister George Papandreou’s lawmakers rebelled over a package of cuts, leading the premier to expel them from his Pasok party. That left him with 157 lawmakers in the 300-seat chamber.
Tomorrow, catering and tourist-industry employees plan another 24-hour strike. Tourism is Greece’s largest industry, accounting for about 16 percent of gross domestic product and one in five jobs, the World Travel and Tourism Council said.
“It’s the usual routine,” said Elina Zaroulia, 25, who does fashion public relations for Hugo Boss in Athens and didn’t join strikers today. “Protesters, banners, slogans, but if you work in the private sector you go to work, it’s the way it is and definitely now that it is a time of crisis.”
Markets in Greece were little affected today. The ASE stock index was down 0.7 percent as of 2:18 p.m. in Athens, on course for a sixth day of losses. Ten-year Greek government bonds yielded 812 basis points more than comparable German debt today, the spread widening from 800 basis points yesterday.
Papandreou, whose union-backed Pasok party prevailed in elections last October, has reduced wages for state workers, trimmed some retirement benefits, and raised sales, fuel and alcohol taxes. The 58-year-old argues the measures, to tame a budget deficit of 13.6 percent of economic output, are needed to prevent the country from defaulting on its debts.
Greek pensioners on average live on 96 percent of the salary they had when they worked, more than twice the proportion of earnings as Germans, according to the Organization for Economic Cooperation and Development. The Paris-based group called the system a “fiscal time bomb.”
Companies are prevented from dismissing any more than 2 percent of their workforce in any given month, just as the Greek economy is mired in its first recession since 1993.
‘Doing Our Job’
“Striking is an irremovable right of the Greek people and of every worker, but we are steadily doing our job,” government spokesman George Petalotis said in an e-mailed transcript of comments made in Athens yesterday. Reforms must be pushed through “as the situation had really reached its limits.”
Pension reforms include increasing the retirement age to 65 from 60 for women, curtailing early retirement, increasing the number of contribution years and calculating payments over a longer period of employment. The bill will be the first enacted since the May 6 package that pledged 30 billion euros of wage and pension cuts and tax increases over the next three years.
When it comes to the job market, the Labor Ministry plans to allow companies to fire 5 percent of their workers. Newcomers would be paid 84 percent of the minimum wage in a bid to boost employment among those aged between 15 and 29.
The unemployment rate for that group was more than 22 percent in the first quarter of this year compared with 18.5 percent last year. Greece’s main jobless rate rose in the first quarter to a 10-year high of 11.7 percent.
“The main target of the new labor-market law is to improve the flexibility in a market that’s considered, together with Portugal and to some extent France, as the most inflexible in the euro area,” said Nicholas Magginas, an economist at National Bank of Greece SA.
The General Confederation of Labor, or GSEE, Greece’s largest union group for workers at private companies, called plans to cut severance pay, abolish terms of collective- bargaining agreements and raise the ceiling on firing employees an “assault” on staff.