Striking Greek transport workers brought Athens to a standstill Thursday in a new protest against austerity measures imposed by the government to secure international financing for the debt-ridden country.
Public transport workers and taxi drivers walked off their jobs, as well as air traffic controllers and teachers. Some newspapers also reacted angrily to the demands of the country's international creditors that the government impose more spending cuts, with one saying that civil servants and pensioners had been placed on a “sacrificial altar” and another saying it was “a merciless raid” on the country.
An Athens business leader said Greece is being turned into a “poverty house” by the series of budget cuts and tax increases the government has imposed in an attempt to end its years of deficit spending and cut its debt.
Finance Minister Evangelos Venizelos called the country's financial plight “extremely critical.” But he said Greece must adhere to its austerity plan in order to secure new funding from the International Monetary Fund, the European Union and the European Central Bank and avoid a default next month.
The EU's economic commissioner, Olli Rehn, pledged that Greece's European neighbors would not abandon it. He said that “an uncontrolled default” by Greece or the country's departure from the bloc of 17 nations that use the common euro currency would cause “enormous economic and social damage.”
The eurozone faces other problems aside from Greece. The financial research group Markit said Thursday business activity in the eurozone contracted this month to a 25-month low, and that further deterioration was likely in the coming months.
But Ireland provided one ray of positive economic news. Like Greece and Portugal, Ireland also needed an international bailout, but Dublin said its national economy expanded by 1.6 percent in the April-to-June period, following a slightly larger expansion in the first three months of the year.
In its latest austerity plan, Greece said Wednesday it will increase the number of civil servants receiving only 60 percent of their normal salaries, cut pensions for some retirees and trim the tax-free portion of wages for low-income workers.
The country's international creditors funding last year's $159 billion bailout are demanding the new round of $8 billion in austerity measures, on top of earlier tax increases and spending cuts.
Greece is mired in a three-year recession and has been hard-pressed to meet the terms of the bailout. It could run out of money in October — and default on its obligations — if the IMF, the EU and the continent's central bank do not release an $11 billion portion of last year's bailout.
The Greek economy will be discussed at the annual IMF meeting in Washington starting Friday.
