Wednesday, February 24, 2010

[olympiaworkers] Strikes, clashes up pressure on Greek government

By DEREK GATOPOULOS, Associated Press, Feb. 24, 2010

ATHENS, Greece – Some 50,000 Greek workers took to the streets Wednesday
and a few protesters threw paint and scuffled with police during the
widest strike yet against the government's austerity plan aimed at fixing
the country's debt crisis.

The unrest flared despite a looming deadline for demonstrating tough cuts
demanded by the European Union to calm the crisis and keep it from
spreading to other countries with troubled finances such as Portugal,
Spain and Italy.

Strikes grounded flights, idled cargo ships and ferries, and left
commuters in Athens without most public transportation. State-run schools,
tax offices and municipalities all shut down and public hospitals limped
by using emergency staff.

In the capital, some 50,000 people marched through central Athens to
protest spending cuts already imposed. The march itself was peaceful, with
scuffles taking place after it ended, and comes after public opinion polls
suggest many Greeks actually recognize the necessity of painful measures.

But Wednesday was the day for the unions to push back.

"We're all here for the same reason: the measures the government is
taking. They have to listen to us," said musician Dimitris Petridis, who
marched banging a snare drum with colleagues to a funereal rhythm.

"The rise in joblessness has really hurt us. The daily wage for working at
a nightclub, for many of us, is the same as it was 20 years ago," he

As the peaceful march ended, riot police clashed and fired tear gas at
scores of anarchist youths in the latest sign of unrest in recession-hit
European countries. Groups of youths vandalized banks and storefronts,
hurling rocks, red paint and plastic bottles near parliament. Three people
were arrested.

Windows were also smashed at the Finance Ministry's General Accounting
Office, which has been accused by the European Union of faking statistics
for years to hide Greece's dire situation.

Greece is considering tougher austerity measures to ward off a financial
crisis that has undermined the euro currency used by 16 European nations.
Its troubles have raised fears that financial market contagion will spread
to other weak eurozone economies such as Portugal, Spain and Italy.

The pressure on the Greek government to deliver on its promise to rein in
the country's borrowing levels ratcheted up further Wednesday with the
news that Standard & Poor's, one of the three leading credit ratings
agencies, could downgrade its rating on the country within a month.

The EU has issued a vague promise to support Greece, which has some euro53
billion ($72 billion) in debt coming due this year, but Prime Minister
George Papandreou's new Socialist government has pressed for more specific
guarantees to shore up market confidence.

Greece has already imposed broad spending cuts but says it is under
pressure from the EU to cut salaries in the civil service. Unions say
cutting Greeks' so-called 14th salary — part of annual pay held back as a
holiday bonus — for public workers would be taken as "an act of war."

"If all these measures are enforced, unemployment will skyrocket. Our
country will enter a massive recession and unemployment will reach a
Europe-wide record," union spokesman Stathis Anestis said. "This will be
tragic because it will provoke social (unrest) and clashes."

Officials from the EU and International Monetary Fund are in Athens to
inspect public finances, ahead of a March 16 deadline to show signs of
fiscal improvement or face imposed additional austerity measures.

Greece has promised the EU it will reduce the bloated budget deficit from
12.7 percent of gross domestic product to 8.7 percent this year. The
country's woes have caused the euro to sink against the dollar and hiked
the country's borrowing costs.

Greek unemployment hit a five-year high of 10.6 percent in November 2009,
up from 9.8 percent in October.

S&P said it was maintaining its current rating on Greece's long-term debt
of BBB+ but was monitoring the situation closely.

"In our view, a further downgrade of one to two notches is possible within
a month," said Standard & Poor's credit analyst Marko Mrsnik.

A two-notch downgrade would take S&P's rating on Greece to BBB- — the
lowest level accepted by the European Central Bank as collateral for
loans. Moody's current rating on Greece is A2, although that may be
lowered soon.

Elsewhere in Europe, other workers fearing job threats also took action
this week.

In France, a strike by air traffic controllers disrupted flights for a
second day Wednesday. In Spain, tens of thousands of demonstrators rallied
Tuesday to protest a government proposal to raise the retirement age by
two years to 67.

In Germany, over 4,000 Lufthansa pilots held a strike Monday to demand
greater job security, causing travel chaos across Europe as over 800
flights were canceled.


AP Business Writer Pan Pylas contributed to this report from London.

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