General strike against the latest austerity measures
Greek workers held a major anti-austerity strike in September 2012 to protest against the coalition government’s latest round of budget cuts. Public sector workers, including tax and customs officers, social security fund workers, employees at municipalities and prefectures, state-owned bank workers, lawyers and a significant number of private sector employees took part in the 24-hour general strike called by the country’s two biggest unions, GSEE and ADEDY.
On 26 September 2012, Greek workers held their first major anti-austerity strike since the coalition government took power in June. The 24-hour general strike was backed by the country’s biggest private sector union, the Greek General Confederation of Labour (GSEE), and the Greek Civil Servants’ Confederation (ADEDY).
Services across the country were disrupted as thousands of Greeks took to the streets in protest at a new round of belt-tightening demanded by the country’s leaders. The action brought together civil servants and other workers, as well as students and pensioners who have all been hit by previous rounds of cutbacks in the country.
Public sector workers, including tax and customs officers, social security fund workers, employees at municipalities and prefectures, state-owned bank employees, merchants, lawyers and a significant number of private sector employees, took part in the protests. The mass demonstrations in Athens, Thessaloniki and 64 cities and major towns nationwide have been seen as a test of public tolerance for more hardship after two years of harsh spending cuts and tax hikes.
Cuts causing misery
According to GSEE and ADEDY, cutbacks to trim the country’s soaring deficit have caused record unemployment rates of almost 24% overall, and 55% among young Greeks. They also say the government’s policies are responsible for the deepening recession, which is now in its fifth year.
According to a joint statement issued at the time of the industrial action:
...salaries, pensions and benefits have been cut again and again for two-and-a-half years, and the ‘monster’ of the debt and deficits remains invincible, constantly demanding new sacrifices.
Much of the unions’ anger was directed at ‘unfair and anti-social’ spending cuts, such as the slashing of wages, pensions and welfare benefits which unions say have heaped a new wave of misery on Greece.
Protest march at parliament
More than 150,000 people joined the union-organised march to the Greek parliament against the latest round of proposed austerity measures. This first large-scale strike since the country’s coalition government was formed grounded flights, disrupted local transport and closed public service offices.
As the strike got under way, the three-party coalition rushed to reach an agreement on how the cuts would be made. Party leaders discussed ways to finalise the €11.5 billion package of savings needed to ensure a further bailout payment in October 2012 from the European Union (EU), European Central Bank (ECB) and International Monetary Fund (IMF) – commonly referred to as the Troika.
Proposed cuts package of €11.5 billion
The Troika has demanded increased and systematic fiscal reforms in order to continue issuing rescue payouts.
Greek Prime Minister Antonis Samaras and Finance Minister Yannis Stournaras have put together a budget cuts package. It has not yet been finalised, but in addition to the €11.5 billion of savings demanded for 2013–2014 by the Troika, it promises a further €2 billion through improved tax collection.
Cuts are expected in wages, pensions, allowances, operational costs, and through the shutdown or merger of hundreds of public entities, including hospitals, schools and nurseries. There are also moves to cut costs on pharmaceutical expenditure, insurance funds and by increasing the retirement age from 65 to 67.
Still under discussion is the issue of 150,000 civil servants who could be laid off or be put into the proposed ‘labour reserve’, where they would receive 60% of their usual salary for one year before being laid off (GR1109029I).
Changes to the tax system for freelance professionals and for wage earners and pensioners are also proposed. The system for taxing freelancers will change significantly, with the introduction of a flat income tax rate of 35%. This percentage will apply to their total net income, and the current tax-free allowance on the first €5,000 of their earnings will be abolished.
The measures also proposed a reduction of the top rate of tax from the current 45% to 35% for salaries and pensions, as well as maintenance of the tax-free allowance on the first €5,000 of earnings for these groups. This, combined with other adjustments to tax scales and rates, is expected to reduce the tax burden on salaried taxpayers.
In addition, the coalition is considering applying the new rules to 2012 incomes – taxpayers will declare their 2012 earnings in 2013 – to bring in an extra €1 billion in revenue.
Prime Minister Samaras aimed to convince his government partners to approve the package so that he could submit it to the Troika for approval. The finalised package was due to go to euro zone finance ministers for discussion at the Eurogroup meeting on 8 November 2012, and a decision was due on 12 November.
A survey carried out between 18 and 20 September 2012 showed a large majority of Greeks were against the cuts. Polling agent MRB questioned 1,003 people about the measures, and more than 90% said they believed that the planned cuts were unfair and continued to burden the poor. The vast majority also expected more austerity in the coming years. With the county in its fifth consecutive year of recession, political analysts argue that the Greek people’s patience is wearing thin and the possibility of an intense public backlash is growing towards the tearing apart of the coalition.
Elena Kousta, Labour Institute of Greek General Confederation of Labour (INE/GSEE)