Only air traffic controllers are not on strike

In Athens yesterday there was a general strike and mass protests against the government initiative to sharply reduce budget spending. “Belt-tightening” is a condition of the EU and the IMF for transferring the next tranche of the loan to Athens. However, more and more doubts are arising in Europe about the advisability of providing further financial assistance to Greece on the same terms.

The epicenter of yesterday's protests in the Greek capital was Syntagma Square (Constitution Square), where the Palace of Parliament is located. More than 25 thousand people gathered for the demonstration. The peaceful protest quickly turned into riots. Protesters threw stones and Molotov cocktails at the police, to which they responded with tear gas.

“Syntagma is already much closer to Cairo’s Tahrir Square than to Puerta del Sol in Madrid (the center of protests by Spanish opponents of the belt-tightening policy. — Kommersant),” wrote Greek law professor Costas Douzinas in his column in The Guardian.

Normal life was paralyzed in virtually the entire capital yesterday. Members of the two largest trade unions, the General Confederation of Labor (GSEE) and the Supreme Council of the Civil Servants Trade Union (ADEDY), did not show up for work. Banks, ministries, pharmacies, and shops were closed. Among the few who returned to work were air traffic controllers - their strike at the height of the tourist season could be the final nail in the coffin of the Greek economy.

The Greek economy has been in recession for more than three years. The authorities are unable to reduce the national debt (last year it amounted to 142% of GDP) and the unemployment rate (more than 16%). The international agency Standard & Poor's on Monday downgraded Greece's rating from B to CCC. At the same time, it is possible that in the next year and a half the country’s rating will fall to level D, which actually means default.

In an attempt to avoid the collapse of the Greek economy, in 2010 the EU and IMF provided Athens with a loan of 110 billion euros. The Greek government is due to receive the next tranche of 12 billion euros in July, but to do this it must take strict austerity measures. Yesterday, the relevant committee of the country's parliament began discussing the program for 2011-2015, which involves increasing taxes, introducing new fees, reducing pensions and privatizing a number of state property. It is expected that thanks to the implementation of the plan, Greece will save 28.4 billion euros. The final vote in parliament is scheduled for June 30.

Meanwhile, the head of the liberal faction in the European Parliament, Guy Verhofstadt, said that “all the new aid packages do not help resolve the crisis in Greece.” The authorities of Germany and the Netherlands agree with his opinion, declaring that Athens should declare a default and begin negotiations on debt restructuring. France and the European Central Bank are against this. The topic of saving Greece is expected to become one of the key topics at the EU summit on June 23-24.

Pavel Tarasenko

The Greek economy stops working