May 2011: Greece’s crisis follows years of inept governance, widespread corruption and waste that created bloated budget deficits and a public debt considerably larger than annual economic output.
Greece is shielded from insolvency by a euro110 billion ($158 billion) package of rescue loans in a 2010-2013 program from its European Union partners and International Monetary Fund.
Despite drastic spending cuts with reductions to pensions and salaries accompanied by an increase in taxes and retirement ages, Greece may need additional support to meet its financing needs next year, as the cost of borrowing from bond markets remains sky-high.
EU and IMF officials are currently in Athens for talks on the austerity program on which the continued release of the bailout loans depends. Greek unions state the protracted austerity, amid a two-year recession and unemployment at around 15 per cent, is unfairly targeting the less well-off.
An opinion poll commissioned by the private Mega TV station stated 71 per cent of the public oppose the government’s handling of the economic crisis, compared with 66 per cent in February.
Parliament is expected to vote on the new round of cutbacks later this month. The governing Socialists have committed themselves to an ambitious privatization program worth a total of euro50 billion ($72 billion) over the next few years.
However, many promised reforms have not yet been implemented, and there is growing skepticism in Greece and abroad over the government’s efficiency. The Socialists’ 18-month-old government held a slender lead over the main opposition conservatives.
Several thousand people some chanting “Finance Minister, leave the planet” took part in the demonstration called by the two main labour unions. Previous protests have also been marred by violence, and three clerks died last May when their bank was torched by rioters.
The fighting divided the 40,000 strong march which was otherwise peaceful into two. At one stage, choking clouds of chemicals fired by police sent demonstrators and tourists scurrying for cover past shops and banks that had their fronts shuttered in anticipation of trouble.
Earlier, about 10,000 members of the Communist-led PAME union held a peaceful protest, with banners reading “We reject and condemn the new measures. We’re intensifying the fight.” Another 8,000 people joined in two separate protests in the northern city of Thessaloniki.
Riot police made heavy use of tear gas and stun grenades to disperse youths throwing stones and petrol bombs at a large march through central Athens Wednesday to protest the Greek government’s harsh austerity measures. The clashes came during a 24-hour general strike that brought most public services to a halt, suspended all train and ferry services, grounded flights for four hours and disrupted public transport.