General strike brings Greece to a surprisingly calm halt

Widespread action to mark second anniversary of eurozone crisis passes off with little violence or unrest

the Guardian,

Thursday 1 December 2011 20.55 GMT

A crippling general strike and street protests by hundreds of thousands of Greeks marked the second anniversary of the eurozone debt crisis on Thursday.

For the prime minister, Lucas Papademos, who is facing his first test since his interim administration assumed power less than a month ago, the mass demonstrations were unusually peaceful and, therefore, a huge success: in a nation used to street violence, not a single shot was fired as riot police refrained from lobbing tear gas into the crowds and stone-throwing anarchists stayed away.

But beneath the apparent calm the anger was still palpable. Trade unionists representing civil servants and private-sector workers said that Papademos, a former vice-president of the European Central Bank (ECB), should expect "sustained battle" against cutbacks that are widely seen as unfair. Hit by a barrage of tax increases and salary cuts, poorer Greeks have seen their purchasing power slashed by up to 70% since the crisis erupted.

"The government may have changed but the policies it is intent on pursuing are totally unjust and do nothing to relieve recession, create development or improve the economy," said Yiannis Panagopoulos, who heads the Confederation of Greek Workers (GSEE), as he attended a rally. "For this reason, alone, the government should expect sustained battle. We will resist. We will not desist."

Further belt-tightening, outlined in an austerity budget that has been drawn up for 2012, prompted mass participation in a general strike that paralysed Greece, with teachers, tax inspectors, doctors, lawyers, civil servants, transport workers, customs officials and rubbish collectors walking off the job. Prime archaeological sites were closed and ferries that ply the routes to the islands were also kept in port as dockside workers joined in the industrial action, the seventh mass stoppage this year. Flights were similarly disrupted.

"People should not be afraid to rise up and go on the attack," said Aleka Papariga, leader of the increasingly popular KKE Communist party. "To do otherwise will mean we will all end up living a tragedy. These inhuman, barbaric measures have to be stopped."

Vowing to step up the protests, the militant labour group Pame, which is aligned to the Communist party, announced it would stage mass demonstrations next week outside branches of the country's national electricity company, DEH, "in every town and in every part of Greece" in a bid to stop a deeply unpopular property tax being levied on households through electricity bills.

Exacerbating the explosive mix is an unemployment rate at 18% – and nearly 43% among youth – the highest in the eurozone after Spain. With over half a million families affected by joblessness as a result of reforms demanded in return from loans by the European Union and International Monetary Fund (IMF), there are growing fears that society is at a tipping point, with unions, leftwing politicians, analysts and economists predicting that the country is poised for a social explosion.

Next year's budget, which aims to push the deficit down to 6.7% of GDP from over 9% this year, was worse than any of the bailout terms agreed by Greece so far, said Ilias Iliopoulos, general secretary of Adedy, which represents 800,000 employees in the public sector. "Firing thousands from the public sector, abolishing collective labour agreements, introducing new wage cuts and at the same time asking people to pay more taxes is not just outrageous. It's absurd," he said.

The rising wave of popular resentment has added to the immense pressure on Papademos, who must now walk a political tightrope in meeting the stringent demands of creditors, if Athens is to remain in the EU, while attempting to appease the populace. The economist has managed to persuade fellow EU leaders to release a long-overdue €8bn (£6.8bn) tranche of aid – a lifeline without which the country would have gone bankrupt – but still faces the huge challenges of negotiating a new bailout agreement with international lenders, passing the budget with a majority vote and concluding a debt reduction deal, outlined in the latest €130bn rescue programme for the nation, in the coming weeks. The bond swap will wipe off an estimated €200bn from Greece's debt once complex negotiations are completed with private investors.

"The Greek people recognise the need for a major economic and institutional transformation and they overwhelmingly support euro area membership, which they perceive as crucial for the success of this effort," Papademos said in a letter to the EU, ECB and IMF released by his office.

"The government is determined to continue the process of fiscal consolidation and structural reform in order to secure sound public finances and improve the country's international competitiveness," he wrote. "Participation in the euro area ensures the preservation of price stability, promotes financial and economic stability and facilitates the implementation of the deep and broad reforms required for the revival of the economy."