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Democrat January-February 2012 (Number 127)

Struggle against austerity and
‘social partnership’ in Greece

Down with the Government, Troika Out! All Workers Militant Front (PAME) demonstration outside IMF delegation's hotel in Athens

Greece is reaching the limit of what can be endured and budget cuts alone will not save the economy said Danish IMF official Poul Thomsen who is overseeing the austerity programme. “We will have to slow down a little as far as fiscal adjustment is concerned and move faster...with reforms needed to modernise the economy”, he said.

   His words came just days after EU leaders criticised the Greek premier, their own appointee, for not keeping to an agreed reform programme, including lowering labour costs and privatising the remaining state assets.

  Germany has been the loudest critic when Chancellor Angela Merkel spoke of her "frustration" with Athens. This was topped when Berlin circulated a controversial idea to have an EU commissioner put in charge of Greece with dictatorial powers over all spending decisions. This flies in the face of all aspects of formal democracy and an electorate’s right to tip out a government it dislikes. This suggestion has for the moment been put on the shelf but may well be put in place at some point.

   There have been several general strikes and massive street protests led by trade unionist against the IMF-EU-ECB austerity programme.

   One protest on 18 January consisted of trade unionists opposed to the austerity policies invading a “social partnership” meeting and bringing it to an abrupt halt. At this meeting were leaders of trade unions in favour of the cuts meeting with employers. One of these trade union leaders fled from his meeting.

 A small selection of what was tabled at the so-called “social dialogue” included:

a two year wage freeze,

restrictions of the seasonal bonuses,

exemption for the employers from up to 15% of the social security contributions which they provide for employees,

the automatic corresponding increase of their profits,

a 5% reduction of business tax.
Apparently, the Greek Government is willing to sign up to another €4.4 billion worth of spending cuts this year to secure a further bail-out loan. The consequent cuts - amounting to about 2 percent of gross domestic product - will be in defence, health-care and pharmaceutical spending.

   Greece's first bail-out from May 2010, amounting to €110 billion, relied on tax hikes and cuts in wages and pensions, reducing the country's deficit from €24.7 billion to €5 billion in just two years. But the country's soaring borrowing costs have made its debt unsustainable.

   A parallel, unprecedented deal with private lenders is being sought to slash at least 50 percent of the interest creditors would cash in on some €200 billion worth of Greek bonds - a precondition for the second IMF-EU-ECB bail-out. However the private lenders do not want to lose their expectations of money from high interest loans.

   The fight is well and truly engaged between employers with bankers against trade unions and the people of Greece.