Wednesday, 5 May 2010

Greece: the fire this time

The resistance in Greece reached new levels today, with tens of thousands taking to the streets against severe cuts imposed by the government.

A 24-hour general strike has brought public services, including schools and tax offices, to a standstill. Planes have been grounded and public transport hasn't run.

Protestors attempted to storm Parliament. Clashes between protestors and police in Athens have been described as more serious than those in the widespread riots in 2008. Tragically, three people were killed in a petrol bomb attack on a central Athens bank.

Police have used tear gas and water cannon. Workers chanted "thieves, thieves" (at MPs) and "don't mess with us". They banged drums as they marched through the streets of the capital.

Trade unions reject government claims that working class people must pay for the crisis in Greece. Spyros Papaspyros, leader of the civil servants' union, said: "There are other things the [government] can do, before taking money from a retiree who earns 500 euros a month".

BBC reporter Malcolm Brabant in Athens commented: "I have not seen this level of anger for quite some time, but the cuts that have been announced are much more severe this time and people have realised how much these austerity measures are going to hit them in their pockets."

One protester, Panayotis Sotiris, told the media that violence was escalated due to police "brutality", saying "I think that the responsibility in the last instance lies with the government because the government unleashed a tremendous amount of police violence against a huge demonstration".

Another protestor simply commented: "It's time to rise up. It's time for revolution."

Greece is under intense pressure from the International Monetary Fund (IMF) and European Union. The massive bailout - 110 billion euro (£95 billion) - depends upon commitment to push through austerity measures that were until recently unthinkable.

The European Commission today forecast a 3% contraction in Greece's economy during 2010. The country's deficit is 13.6% of its GDP. The Socialist government, EU and IMF are demanding workers and pensioners pay the price.

Austerity measures already announced include pay cuts for civil service workers, raising the retirement age for women to 65, and scaling back of pensions. The Greek parliament is expected to vote tomorrow on savage budget cuts amounting to 30 billion euro in 3 years.

Public sector pay is frozen until 2014. Taxes on fuel, alcohol and tobacco are up 10%. VAT is increased from 19% to 23%.

Fears that the Greek crisis could spread have triggered falls in Asian, European and US markets yesterday or today. The economies of Spain and Portugal have emerged in recent days as especially vulnerable.

Angela Merkel, chancellor of Germany, today said "we are at a fork in the road" and that "the future of Europe is at stake". Germany is leading the way in bailing out Greece, due to its fears that the deepening crisis could pull down the whole Eurozone. The bailout is designed to prevent Greece from defaulting on its massive debt.

Today's events coincided with the European Commission's spring forecast, which put the UK's budget deficit at 12% of annual GDP. This is even worse than the forecast for Greece and means the country will have the largest deficit (as a percentage of GDP) of any EU country.

This highlights the likely severity of public sector cuts after tomorrow's general election, as all three mainstream parties are dedicated to cutting services and welfare in order to reduce the deficit. Whatever the outcome of the election, there will be a programme of savage cuts. Greece may offer an image of our future, both in its crisis and in the social unrest the crisis is generating.

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