Greeks on strike over austerity

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AppId is over the quota
5 October 2011 Last updated at 17:59 GMT A protester explains why she is against the austerity measures in Greece

Dozens of stone-throwing youths have clashed with police in Athens as public sector workers went out on strike in protest at Greece's austerity measures.

The 24-hour strike saw flights and ferry services cancelled, government offices and tourist sites closed, and hospitals working with reduced staff.

Many strikers expressed frustration and anger at the cuts.

The European Commission is discussing ways of propping up banks in Europe to protect them from the Greek crisis.

The general strike is the first since the Greek government announced an emergency property tax and the suspension of 30,000 public sector staff last month.

But despite these measures, the government has failed to cut its deficit to 7.5% of economic output (GDP) - a target it must meet if it is to receive the next instalment of bailout money from the EU.

Meanwhile, in its latest report on the European economy, the International Monetary Fund (IMF) has warned that economic growth is in danger of petering out and a global recession in the coming year cannot be ruled out.

Global financial markets have been in turmoil over fears that Greece could default on its debt, most of which is held by European banks. In other developments:

On Tuesday, Moody's ratings agency slashed Italy's credit rating from Aa2 to A2, blaming an overall loss in confidence in eurozone governments.Despite the Italian downgrade, European markets rose sharply as trading opened on Wednesday.Belgium and France are working on plans to rescue the Franco-Belgian Dexia bank, which is exposed to Greek debt.German Chancellor Angela Merkel said again that Greece must remain a member of the eurozone.'Lives ruined'

The government says the stringent austerity measures cannot be avoided if the country is to reduce its deficit of 8.5%.

Continue reading the main story Mark Lowen BBC News, Syntagma Square, Athens

It is a very noisy demonstration indeed here, certainly the biggest demonstration by Greece's public sector in several weeks. The country has ground to a halt.

All of these people are extremely angry at the austerity measures that the government is desperately trying to push through to qualify for the next instalment of its international bailout, in order to stave off bankruptcy and avoid defaulting on its debts.

The government says it is in a very difficult position, because it must pursue its austerity drive to meet its fiscal targets and reduce the budget deficit to avoid bankruptcy within the next few weeks.

But this wave of social unrest is growing by people who say the measures are deepening the recession, stagnating the economy and stunting Greece's growth.

But the measures are hugely unpopular and have led to a wave of strikes and protests.

Tens of thousands of people stayed away from work across Greece. In central Athens, at least 16,000 marched to Syntagma Square to join a demonstration outside parliament.

Although most of the protests were peaceful, police fired tear gas at small groups of demonstrators who were throwing stones.

About 10,000 people marched in the northern city of Thessaloniki.

Critics of the austerity drive say it is deepening the recession, stunting Greece's growth - the economy will shrink 5.5% this year - and stopping the country from being able to reduce its government debt itself.

Protesters also say they are unfairly bearing the burden of the country's debt.

"This is an opportunity for the Greek people, whether in the public or in the private sector, to fight this, to deny this logic that we must bow our heads all the time to save the country and show patriotism," said 37-year-old protester Dimitris Kizilis.

"We believe, as workers, that patriotism is to respond with actions."

Continue reading the main story

There are some European regulators and politicians who regard the downgrade of Italy and the woes of the Franco-Belgian bank Dexia as positive events (oh yes) ”

End Quote Robert Peston Business editor, BBC News Stathis Anestis, a spokesman for Greece's main union the GSEE, said the new measures were "just extending the unfair and barbaric policies which suck dry workers' rights and revenues, and push the economy deeper into recession and debt".

"With this strike, the government, the EU and the IMF will be forced to reconsider these disastrous policies," he told Reuters.

Greek civil servant and trade unionist Tiana Andreou told the BBC that people's lives had been ruined.

"We have decided that we're going to stop this."

Some militant civil servants are promising to sabotage the moves. On Tuesday, protesters again blocked the entrance to several government departments, including the finance and transport ministries.

The government says it has enough cash to pay pensions, salaries and bondholders until mid-November, having previously said it needed more money by mid-October to avoid a default.

Inspectors from the IMF, European Central Bank and European Commission - known collectively as the troika - have been in Greece this week to assess its financial situation.

But eurozone finance ministers have delayed a decision on handing over the money, after Greece said it would not meet this year's deficit-cutting plan.

The government admitted that the budget deficit will stand at 8.5% this year, rather than the 7.5% target.

On Wednesday, the IMF's European chief Antonio Borges said there was no rush for the second bailout, and that he was "confident negotiations will come to a positive conclusion".

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Greeks worry about ambitious privatisation plans

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4 October 2011 Last updated at 23:30 GMT By Nigel Cassidy Business correspondent, BBC News, Athens The Greek lottery OPAP will be sold as part of an ambitious privatisation programme Go into any of Greece's 5,000 OPAP lottery shops and there is one thing you definitely cannot bet on.

It is that the array of Greek state assets lined up for sale will fail to raise an agreed 50bn euros by 2015 to lighten the country's crushing international debts.

OPAP is on a long list of nearly 20 entities earmarked for full or partial sale, by order of the European Union (EU) and the International Monetary Fund (IMF).

They are the sell-offs Greece's European partners are now demanding should be stepped up, not least because efforts to raise revenue through tax receipts are still defeating the country.

But in spite of Greece's lofty plans, the BBC has found that only one solitary stake has actually been sold in recent months: a 10% stake in the mobile phone group OTE has been bought by Deutsche Telecom for 400m euros.

Consequently, the chances of Greece reaching its target of raising 5bn euros by the end of the year from asset sales look slim.

Fear and frustration

It is easy to see why the programme is being opposed every step of the way by most of the state's employees.

As protesters unfurl their banners in Syntagma Square, it is clear that they bracket all the mooted sell-offs with other unpalatable measures, such as austerity tax rises and job cuts.

Greek utility workers are wary about plans to sell off the companies they work for

Staff fear that as public services - from power and water supply to transport and defence industries - are sold, it is inevitable that their pay and pensions will be drastically cut.

For their part, Greece's European partners are infuriated at the painfully slow progress in freeing up all these utilities.

Critics frequently suggest Greek privatisation is mired because the Pasok party in power has traditionally protected state workers, and is not pushing the measures through with enough vigour or conviction.

Much resistance

Whether or not this is true, there are several other reasons for the delays.

Some of these are apparent if you take a ride to the Athens suburb of Zografou.

(Bids for 49% of the railway OSE are welcome, by the way, but offers may not be forthcoming until losses of a billion euros a year have been stemmed.)

Greece remains "the last Soviet bastion in Europe", says Eydap's chief executive Nikolaos Bardis

This is where you find the headquarters of Eydap, the well-respected water and sewage utility serving Athens, which employs 2,800 workers and has a good reputation for maintaining supplies of high-quality drinking water.

Eydap is supposed to be privatised next year, but the company says little has happened since it was put on the list.

Few workers are expected to lose their jobs after any sell-off, but bosses admit that pay, conditions and pensions may not be maintained at current levels.

Yet a huge union poster outside the front door shows a wad of euro notes, with a running tap emerging from them.

The message: Do not try to profit from our essential services.

'Soviet bastion'

There are two reasons why the sell-off process has been slow, according to Eydap's chief executive Nikolaos Bardis.

Bureaucratic delays have contributed, as have investors' concerns that the potential value of the company might fall, given the current financial climate.

"We can say that Greece remains the last Soviet bastion in Europe," Mr Bardis says.

"There is a lot of opposition to the process. Socially this is a completely new idea. People here are just not used to private investors controlling state-owned companies.

"It is also true that the (Eydap) capitalisation is low because the market is extremely distressed and [the sell-off] didn't happen much earlier when the capitalisation was larger."

Investors' concerns

Mr Bardis has recently returned from a visit to the City of London to drum up investor interest in his company.

MP Elena Panaritis says privatisation is slow because democracy in Greece is weak

One concern expressed there was that the Greek government was retaining the right to set water charges, a job that might be expected to fall to an independent regulator.

Potential buyers do not like the idea of political interference in consumer charges, which could easily have the effect of wiping out profits or investment spending plans, Mr Bardis observes.

"They are also concerned about the country's solvency and whether it will stay in the eurozone or be forced to re-adopt the drachma," he says.

"And they are making the assumption that the country will ask its lenders to take a 50% haircut on its loans," he adds, which means the lenders should expect only half their money to be repaid.

While investors are getting used to the idea, the same seems to be the case with the Greek people, who are gradually coming to realise that their country is broke.

"I do believe there is now a a silent majority in the society which is in favour of reform," says Nikos Koritasis, a principal at the Koultadis law firm that is deeply involved in the country's gas privatisation.

The company is working for a new Greek agency that has been set up expressly to run the sale of the country's assets, and Mr Koritasis insists people understand Greece has to try something new.

"There have been long delays, but there is now a new will to speed up the whole process," he says.

Speedy privatisation

One member of the Greek parliament who has a clearer perspective than most is Elena Panaritis.

She is a former World Bank executive, brought into the ruling Pasok party by Prime Minister George Papandreou to help oversee decisions and educate other politicians about the ways of the markets.

Following another long night of parliamentary debate, the country is making "superhuman" efforts to clear the way for the privatisations, yet it is taking time, she laments.

"We haven't been able to be as effective precisely because our bureaucracy is so bad," she reasons.

"Getting anything done is so complicated, with conflicting regulations and far too many people involved in taking decisions on each single asset.

"All this is taking longer than the 16 months we have to get it resolved. There really is the appetite to get the job done, but there are layers of steps and we get bogged down with the actual details."

It took the privatisation pioneer Britain well over a decade to free up and sell off its essential industries. Greece is expected to do much the same in a few months.

So it is no wonder that privatisation is a hard sell. It is another leap for this state-dominated island nation into what are seen as shark-infested commercial waters.

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