TBF
05-04-2010, 04:59 PM
5/4/2010 7:36 PM ET
Thousands of Greek public sector workers launched a 48-hour strike on Tuesday in protest against the new austerity measures agreed by the Greek government in exchange for a 110 billion euro bailout loan offered by the European Union and the International Monetary Fund.
The strike was called by unions representing teachers from the public sector, a day ahead of a planned nation wide general strike by public and private sector workers, including teachers, lecturers, bank employees and doctors.
Greek officials said thousands of teachers and students, along with some 200 retired workers, participated in Tuesday's demonstrations. Though the demonstrations were largely peaceful, clashes erupted between riot police and protesters near the parliament building.
The developments follow approval by the European Union and the IMF for an unprecedented $146 billion joint aid package to Greece on Sunday. The approval came after Greece made a formal request for the immediate activation of the crisis loans promised by the EU and IMF to help it tackle ballooning debt and massive deficits.
The joint EU-IMF 110 billion euro bailout loan would be paid over three years to Greece. While the EU has agreed to provide 80 billion euros as its share of the bailout package, the rest will come from the IMF.
The EU indicated that the first part of the loan will be released before 19 May, when Greece is scheduled to make its next debt repayment. Also, the IMF managing director Dominique Strauss-Kahn has indicated that his agency is expected to approve its share of the loan later this week.
In order to gain access to the loan package, the Greek government, however, is required to enact wide-ranging austerity measures, including spending cuts and tax increases. The Greek government has already admitted that it can no longer raise money from international markets after borrowing costs reached prohibitive levels.
The Greek government has already tabled a package of proposed austerity measures before the country's parliament for approval. The government indicated that it anticipates the parliament to approve the newly drafted austerity measures "in about a week".
The new cost-cutting measures include scrapping bonus payments for public sector workers, capping annual holiday bonuses and removing them altogether for higher earners, banning increases in public sector salaries and pensions for at least three years, increasing VAT from 21% to 23%, raising taxes on fuel, alcohol and tobacco by 10% and taxing illegal construction.
Greece is currently struggling under the burden of huge debts and is expected to face a crunch situation in April and May, when it faces more than 20 billion euros in debt redemption. However, recent downgrading of Greece's credit ratings by international ratings agencies have made it more difficult and expensive for the eurozone member-nation to borrow money from the financial markets.
Since the financial crisis erupted, Greece announced at least two sets of austerity measures to help it reduce the budget gap to 2.8% of GDP in 2012 from the current level. However, the unpopular cost-cutting measures had prompted workers' unions to call for a series of industrial actions.
The austerity measures came after Prime Minister George Papandreou was left with no option but to adopt cost cutting measures for the third time in as many months to convince European allies and investors that it can bring the region's biggest budget gap under control.
Last Friday, Papandreou told his parliament that the joint bailout package offered by the EU and IMF in exchange for stricter austerity measures were essential for the survival of the country. Insisting that cost-cutting measures were required to bring the country's budget deficit down by 10% by 2013, Papandreou stressed that such measures were essential for preventing the country from collapsing under the burden of massive debts.
The Greek PM also acknowledged that the negotiations with the IMF and EU were tough, but admitted the opposition his government was facing from the Greek public was even tougher. His remarks came as negotiations on the bailout package were progressing between representatives of the EU, IMF and the Greek government in Athens.
by RTT Staff Writer
http://www.rttnews.com/Content/GeneralNews.aspx?Id=1292411&SM=1&pageNum=2
Thousands of Greek public sector workers launched a 48-hour strike on Tuesday in protest against the new austerity measures agreed by the Greek government in exchange for a 110 billion euro bailout loan offered by the European Union and the International Monetary Fund.
The strike was called by unions representing teachers from the public sector, a day ahead of a planned nation wide general strike by public and private sector workers, including teachers, lecturers, bank employees and doctors.
Greek officials said thousands of teachers and students, along with some 200 retired workers, participated in Tuesday's demonstrations. Though the demonstrations were largely peaceful, clashes erupted between riot police and protesters near the parliament building.
The developments follow approval by the European Union and the IMF for an unprecedented $146 billion joint aid package to Greece on Sunday. The approval came after Greece made a formal request for the immediate activation of the crisis loans promised by the EU and IMF to help it tackle ballooning debt and massive deficits.
The joint EU-IMF 110 billion euro bailout loan would be paid over three years to Greece. While the EU has agreed to provide 80 billion euros as its share of the bailout package, the rest will come from the IMF.
The EU indicated that the first part of the loan will be released before 19 May, when Greece is scheduled to make its next debt repayment. Also, the IMF managing director Dominique Strauss-Kahn has indicated that his agency is expected to approve its share of the loan later this week.
In order to gain access to the loan package, the Greek government, however, is required to enact wide-ranging austerity measures, including spending cuts and tax increases. The Greek government has already admitted that it can no longer raise money from international markets after borrowing costs reached prohibitive levels.
The Greek government has already tabled a package of proposed austerity measures before the country's parliament for approval. The government indicated that it anticipates the parliament to approve the newly drafted austerity measures "in about a week".
The new cost-cutting measures include scrapping bonus payments for public sector workers, capping annual holiday bonuses and removing them altogether for higher earners, banning increases in public sector salaries and pensions for at least three years, increasing VAT from 21% to 23%, raising taxes on fuel, alcohol and tobacco by 10% and taxing illegal construction.
Greece is currently struggling under the burden of huge debts and is expected to face a crunch situation in April and May, when it faces more than 20 billion euros in debt redemption. However, recent downgrading of Greece's credit ratings by international ratings agencies have made it more difficult and expensive for the eurozone member-nation to borrow money from the financial markets.
Since the financial crisis erupted, Greece announced at least two sets of austerity measures to help it reduce the budget gap to 2.8% of GDP in 2012 from the current level. However, the unpopular cost-cutting measures had prompted workers' unions to call for a series of industrial actions.
The austerity measures came after Prime Minister George Papandreou was left with no option but to adopt cost cutting measures for the third time in as many months to convince European allies and investors that it can bring the region's biggest budget gap under control.
Last Friday, Papandreou told his parliament that the joint bailout package offered by the EU and IMF in exchange for stricter austerity measures were essential for the survival of the country. Insisting that cost-cutting measures were required to bring the country's budget deficit down by 10% by 2013, Papandreou stressed that such measures were essential for preventing the country from collapsing under the burden of massive debts.
The Greek PM also acknowledged that the negotiations with the IMF and EU were tough, but admitted the opposition his government was facing from the Greek public was even tougher. His remarks came as negotiations on the bailout package were progressing between representatives of the EU, IMF and the Greek government in Athens.
by RTT Staff Writer
http://www.rttnews.com/Content/GeneralNews.aspx?Id=1292411&SM=1&pageNum=2