GREECE | 11.03.2010

Nationwide strikes cripple debt-ridden Greece - again

Greeks are protesting against their 'dead' economy

As Greece implements further austerity measures to reduce debts and consolidate its deficit, the people have reacted with another round of strikes. Experts remain divided on how Greece can rescue itself from its deficit.

Angered by tough austerity measures introduced by the government, Greek public and private sectors went on strike on Thursday.

The 24-hour walkout grounded flights from midnight Wednesday as air traffic controllers joined the strike while ships remained anchored across the country as the sailor's union joined the protest. Trains, buses, the metro and tram are not in operation in Athens or the northern port city of Thessaloniki.

Flights and passengers were down at Athens on Thursday

"Workers will raise their fists and shout with a united voice: We will not be held responsible and pay for the crisis," private sector union GSEE said in a statement. "We will not stand by while our workers are terrorized."

Tourist sites such as the Acropolis and museums, government offices and schools have closed for the day, and public hospitals are only open for emergencies.

Little information is filtering out as a nationwide 24-hour news blackout has also been called, with radio, print and television journalists also taking part in the walkout.

This is the second nationwide strike in less than a month against Greece's austerity package, and it has once again brought the nation to a standstill.

Prime Minister George Papandreou expressed sympathy for the strikers but added that the government was not to blame and that there was simply "no money" for any other course of action.

Papandreou and Chancellor Merkel met last week in Berlin

A feasible way out?

Under serious pressure from the European Union and international markets, Papandreou's government unveiled the new austerity package last week - the third in recent months - aimed at raising 4.8 billion euros ($6.5 billion).

The measures include a rise in consumer tax, cuts in civil servant incomes and a pension freeze intended to cut the deficit of 12.7 percent - over four times the EU's limit - and to rein in on debts of nearly 300 billion euros.

Professor of finance at the western German University of Hanover, Lukas Menkhoff, says there are three viable scenarios for how Greece can escape its deficit crisis.

Traditionally, says Menkhoff, when a nation finds itself as deep in debt as is the case in Greece, the first step is to devalue the currency. Seeing as though Greece is part of the euro zone, this would mean Athens would have to leave the EU.

Menkhoff says a Greek exit from the EU is not unthinkable

"This is not as dramatic as it may appear," says Menkhoff, "for Greece could solve a number of its problems by exiting the European Union. Of course, this would have to happen in a very controlled manner, without any outbreak of panic. If Greece's exit from the EU could take place without setting off a political crisis, it would be a very serious option."

The second option sees Greece remaining in the EU but would call for the bloc's larger economies - like in Germany or France - to decrease their economic competitiveness by increasing inflation. Menkhoff is skeptical of this, however, seeing as though the global economic crisis still persists.

Greek citizens feel deserted

The third - and most probable - sees Greece continue with its restrictive politics and further austerity measures, combined with a rescue package from the European Union.

The European Commission - the EU's executive arm - welcomed Greece's latest austerity package but said it wanted to see it implemented quickly and smoothly. For that to take place, however, public support of the cost-cutting programs will be crucial.

Greeks will have to return to work to save the country

Greek citizens, meanwhile, feel that the EU has deserted their country as it struggles to curb in mounting debts and reduce its deficit.

Remi Lallement, advisor to the French government on economic affairs, sides with the Greek people.

"We have to look at this crisis from all sides and not simply demand that Greece cut costs and consolidate its deficit. The European Union is in the end a union, and a union is not only about economic competitiveness," Lallement said.

But even if until now Athens has waited in vain for concrete aid from the EU, the idea that the bloc would simply let Greece fall remains implausible.

However, fact remains fact: Greece has until the end of May to restructure around 20 billion euros of its debt. Mere austerity measures like those that have set off a second round of crippling strikes will not be enough to save the country from going belly up.

Author: Zhang Danhong (glb/AFP/dpa)
Editor: Jennifer Abramsohn

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