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Greece's plans to cut public sector spending lead to strikes from workers who say they sacrifice enough.
UPDATE: European leaders have reached a deal to help Greece out of its financial crisis, EU President Herman Van Rompuy said Thursday. Immediate details were not available, but Polish Prime Minister Donald Tusk told reporters earlier that the aid was likely to come in the form of voluntary loans.
ATHENS, Greece — First it was the farmers, who have been blocking Greek roads and border posts with their tractors for weeks. Then, on Wednesday, civil servants shut down airports, public offices and schools. Taxi drivers take their turn today, when they’ll strike over new fuel taxes.
As Greece struggles to cut public spending and tackle its double-digit budget deficit, it’s facing resistance from unions and workers who say they shouldn’t be the ones to pay for the state’s profligate ways. They hope a wave of public discontent will force the government to back down on pledges to cut public sector wages and increase the retirement age, as has happened in the past.
“Cutting wages won’t affect the real, deeper problems in the economy,” said Ilias Vrettakos, vice president of ADEDY, the largest Greek public servants union, which organized Wednesday’s strike. “The capitalists got us into this situation and the capitalists should pay.”
But with intense pressure from the markets and other European countries — along with intensifying rumors that a bailout is imminent — Greece’s four-month-old Socialist government has little room for compromise.
While Greece’s economic problems have been dominating the headlines in recent weeks, the fundamental problems stretch back decades — back to before the country joined the European Union and eurozone. Successive governments have used the public sector to reward supporters, while turning a blind eye to corruption.
In the public sector, “the wages are low and the productivity is low,” explained Stravros Katsios, associate professor of international economic relations at the Ionian University in Greece. Under the system as it exists, public sector employees are forced to take second, under-the-table jobs. Their work for the state brings benefits, but little pay: “We pretend to pay them and they are pretending to work.”
The toxic mix of widespread tax evasion — which reduces revenues — and a bloated civil sector has led to the fiscal mess Greece currently finds itself in. Greece’s finance ministry estimates that there are 700,000 public employees in Greece, but some estimates put the number at over a million, nearly one in four workers. The reality is the government itself doesn’t know how many people it pays. It’s trying now to create a centralized payroll system.
But ordinary workers, like the ones who took to the streets on Wednesday, say their salaries are already low and their tax burden is high.