Public Service Workers Strike in Greece

By Nathan Morley

February 10, 2010

Public service workers in Greece have begun a one day strike to protest plans to cut pensions and freeze wages. These measures were sparked by a debt crisis which has increased concerns about the stability of the euro.

Greek public sector employees are protesting a series of harsh austerity measures announced by the government to tackle the country's dire financial problems. Thousands of teachers, doctors, nurses, train workers and air-traffic controllers are taking part in the 24-hour work stoppage.

Financial measures announced by the Greek government on Tuesday involve changes to income, taxation and include salary freezes and cutbacks in benefits. The government also announced plans to raise the country's retirement age in order to save money on pensions.

Protest demonstrations and marches, which have brought the country to a stand still, have been taking place throughout the day in downtown Athens and throughout Greece.

The work-stoppage has grounded all flights, since the country's air traffic controllers and civil aviation electronics engineers are participating in the strike.

A crisis over the public finances in Greece and growing concerns about Spain, Portugal, Ireland and Italy has put pressure on the value of the euro - the currency used by 16 EU members.

The cost of borrowing for the government in Greece has been rising, sparking concerns that in the coming months Athens will find it impossible to borrow the money it needs - and might have to be bailed out by the European Union.

Joaquin Almunia, the EU Economic Affairs Commissioner welcomed the urgent measures introduced by the Greek government to put their finances in order.

"We share the objectives and targets established by the Greek authorities in their stability program to correct the balances of the Greek economy, both the fiscal imbalances and other economic imbalances," he said.

Greece's budget deficit is, at 12.7 percent, more than four times higher than euro zone rules allow. Its debt is about $419 billion.

There have even been suggestions that Greece may have to leave the euro and revive the defunct Drachma - but such a move would have enormous consequences for Greece and the whole euro zone.

Mark Thompson is a corporate foreign exchange expert at Money Corp; said that he doubts that such drastic measures as a reversion to the Drachma would happen.

"Well, I think the European Union will do everything within in its power and really try and stop that outcome happening, just because if they can't look after one of their own member states then it really just undermines the whole philosophy behind the Euro," he said.

European Commission President Jose Barroso has insisted that the euro will stay the course and the European Union has the means to address any challenges faced by member countries.