A 24-hour public transport and taxi strike is snarling traffic in the Greek capital, while a work stoppage by air traffic controllers has forced airlines to cancel or reschedule flights as unions lash out against more austerity measures.
Today’s strikes in Athens come a day after Greeks were hit with another round of tax hikes and pension cuts as part of the government’s scramble to keep international bailout payments flowing and soothe global market fears that Greece will default.
With all forms of public transport, including the metro, buses, trams, trains and taxis on strike, Athenians struggled through traffic-clogged streets to make their way to work on what has been designated World Carfree Day.
Air traffic controllers will walk off the job for three hours in the afternoon.
The Greek cabinet ramped up its austerity drive last night in a fresh bid to secure payment of a crucial €8 billion bailout loan before the country runs out of cash within weeks.
The plan will cut some pensions by 20 per cent, put 30,000 state workers on 12 months’ notice with a 40 per cent pay cut and extend by at least one year a new property tax.
After a summer lull in protests, Greek unions are already planning a new wave of strikes.
The new budget plan follows blunt warnings from Germany and other euro zone powers that the country’s next tranche of aid will be withheld if it does not take action to meet the terms of its agreements with its lenders.
This has stirred mounting fear of a Greek default and a big escalation of tension in financial markets.
At the United Nations General Assembly, US president Barack Obama yesterday called for co-ordinated global action to tackle the financial crisis.
Mr Obama appealed for “urgent and co-ordinated action” by the international community to meet the challenges of the global economic crisis.
“Three years ago, we confronted the worst financial crisis in eight decades. That crisis proved a fact that has become clearer with each passing year – our fates are interconnected; in a global economy, nations will rise, or fall, together,” he said.
“Around the world, recovery is fragile. Markets are volatile. Too many people are out of work . . . We acted together to avert a depression in 2009. We must take urgent and co-ordinated action once more,” he added.
However, a senior European source said no initiatives were in the works beyond an ongoing manoeuvre by global central banks to provide emergency dollar loans to weakened euro zone banks.
In a widely anticipated effort to stimulate the flagging American economy, the US Federal Reserve took steps last night to reduce long-term interest rates and increase its support for housing.
The new Greek plan is still subject to the approval of euro zone finance ministers and the EU-IMF troika, which withdrew a mission to Greece three weeks ago in a dispute over a succession of missed targets in its rescue programme.
After two nights of telephone talks, top-level inspectors from the troika are returning to Athens to sign off on the new measures.
Greek ministers met for several hours yesterday to approve the plan. As their meeting continued, the country’s biggest unions declared plans to contest the endeavour with two days of strikes next month.
“The measures taken today allow us to comply with the bailout plan through 2014,” said Greek government spokesman Ilias Mossialos.
“The discussions with the troika will be completed after the arrival of inspectors early next week.”
The plan comes amid acute doubt in markets about the viability of the country’s rescue programme.
While those concerns find increasing echoes in official and diplomatic circles, European leaders have resolved to stay the course with Greece. European Union officials fear, however, that the new plan could yet lead to the collapse of the administration led by prime minister George Papandreou.
The government has a four-seat majority and internal divisions emerged last summer over a previous austerity effort led Mr Papandreou to appoint his main political rival, Evangelos Venizelos, as finance minister.
Ahead of its annual meeting this weekend in Washington, the International Monetary Fund issued a renewed warning about the fragility of Europe’s banks.
In a new report, the fund said time was running out to tackle weaknesses in the world financial system.
The “global stability report” added to pressure for a big recapitalisation of the banking sector by saying debt crisis has generated some €300 billion in credit risk. This figure is €100 billion greater than previous estimates.
