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Posted by on Oct 20, 2011 in At TMV, Economy, International | 2 comments

Greece: Mother of All Strikes Ahead of Tough Austerity Vote

Tom Janssen, The Netherlands

The political and financial turmoil continues in Greece. Bigtime. The context: yet another vote on a tough austerity plan. The political setting: the “mother of all strikes” before the vote. The Christian Science Monitor reports:

Greece is today racked with protest and violent episodes in what is being called the “mother of all strikes,” ahead of another vote on austerity cuts and higher taxes.

Those cuts will now start to reach into the core of the Greek public sector, which has long been seen as bloated and loaded with patronage. But the austerity measures Prime Minister George Papandreou’s government is expected to implement, starting with 30,000 jobs, will begin to touch more deeply the middle class of a country that is a founding member of the European Union.

The economic consequences of Greece’s debt crisis continue to shake Europe, whose leaders convene on Sunday in Brussels to contain the crisis.

But with 70,000 and possibly 120,00 people on the street, pushing their way to the top of the parliament stairs in Athens, clashing with police – more questions will be asked about the social consequences of the crisis.

Today’s protest now increasingly appears to be just the surface expression of an anger and bewilderment that is no longer confined to Greece’s trade unions, unemployed youth, and to others that live close to the street. It is spreading to small business owners, the intelligentsia, the policy community, academics, and other members of the elite and near elite.

“The main sentiment right now is desperation,” says Andreas Antoniades of the Institute of International Relations in Athens. “We don’t know where we are, or how to get out of this problem. Not just ordinary people, but political elites feel this. It feels like the situation is not in Greece’s control, and that Europe can’t control the crisis.

Reuters:

Tens of thousands of demonstrators rallied in front of the Greek parliament on Thursday after violent clashes the previous day as a general strike continued against a deeply unpopular austerity law expected to be approved later in the evening.

Deputies are expected to pass the plan, required by the European Union and International Monetary Fund, after the bill passed a first vote on Wednesday, when protests degenerated into street battles between black-clad rioters and police.

But at least two ruling party MPs have said they might vote against one of the bill’s provisions, threatening to weaken the government’s narrow majority as it fights a debt crisis that is shaking global markets.

Around 20,000 people assembled in front of the parliament by late morning, many wearing surgical masks against the tear gas and pepper spray still hanging in the air from the previous day and carrying banners with slogans such as “Throw them out!”

The 48-hour general strike called by unions representing around half the Greek workforce is one of the largest protests since the start of the crisis two years ago and brought more than 100,000 people to the streets on Wednesday.

The unrest left central Athens covered in smoldering rubbish and lumps of masonry hacked off buildings in a repeat of clashes seen in anti-austerity protests in June.

Early on Thursday, Sofia Giannaka, a potential rebel deputy, indicated she would probably vote in favor of the provision, which suspends some collective pay accords, but she said she would not accept any more major cuts.

“There will be no next time,” she told Greek radio.

The government’s majority of 154 seats in the 300-member parliament is expected to see the bill through but any defections would be embarrassing as Athens struggles to convince international lenders to continue their support.

The Globe and Mail:

The austerity measures will reduce the wages of civil servants by about 14 per cent, eliminate about 30,000 of their jobs by the end of the year and reduce pension benefits. Approval of these measures is required before the International Monetary Fund (IMF) delivers another €8-billion instalment of last year’s €110-billion bailout package.

Athens has warned it will run out of money next month unless the instalment is delivered.

If the vote is lost because of possible PASOK defections, Greece would probably descend into economic and social chaos. The austerity measures would probably fail and the IMF and the European Union might withhold further funding. New elections would have to be called.

As the protesters in Athens amassed on Thursday, EU leaders came under extreme pressure to produce a definitive debt-crisis-fighting plan at their summit in Brussels on Sunday. The pressure is especially fierce for French president Nicolas Sarkozy and German chancellor Angela Merkel.

Meanwhile, what happens in Greece won’t stay Greece. For one thing, it could have political consequences in Germany:

German Chancellor Angela Merkel may be risking her 2013 bid for a third term with a bet on expanding the effort to save the euro.

Merkel may endorse policies unpopular with her Christian Democratic voters at an Oct. 23 European summit, bowing to world leaders including President Barack Obama to do more to stem the debt crisis that began in Greece and is now rattling core economies such as Italy and France.

“Merkel’s next step is to convince voters,” Giles Merritt, head of the Friends of Europe research group in Brussels, said in a telephone interview. “The German media have been hammering away in a tabloid manner on the idle Greeks and this has gone deep into the German psyche.”

Failure to make her case to the electorate means Merkel may face the political hara-kiri of her predecessor, Gerhard Schroeder. The Social Democrat alienated core supporters with his “Agenda 2010” package of tax and benefits cuts that subsequently fueled the German economy and still led to his downfall. Germany’s next election will probably be held in September 2013.

“This is very much an Agenda 2010 moment for Merkel, but it’s much bigger than what Schroeder faced,” Jan Techau, director of the Brussels-based European center of the Carnegie Endowment for International Peace, said in an interview.

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