The Greek debt crisis flared up again Friday when labor unions called for a general strike to protest a new round of taxes and cuts to pensions. The strike, set to last 48-hours, has shut down most forms of transportation and schools in Athens.
The protests are aimed at rejecting new austerity measures set to be voted on Sunday night. The new cutbacks to would reduce pension payments to new retirees and require higher social security contributions. It would also raise taxes on high earners.
The socialist Syriza government is hoping to pass the cuts Sunday prior to a Monday meeting of the Eurozone where Greece will seek billions in new loans needed to avoid default this summer. The Guardian reports:
In a repeat of the drama that dominated the eurozone last year, Athens faces the spectre of default if its fails to honour maturing European Central Bank bonds and IMF loans in July.
Long overdue rescue loans worth €5bn are at stake. Receipt of the funds depends on completion of a first progress report, or evaluation, of the economy that has been drawn out for the past nine months and has stalled over lender disagreement. With discord over Athens’ ability to achieve fiscal targets, creditors recently upped the ante, demanding an additional contingency package of €3.6bn, the equivalent of 2% of GDP.
Meanwhile, the labor unions are refusing to go along with the new round of cuts. The result is angry unionists protesting the far-left socialist government they elected last January (there was another election in September). RT published video Friday of a group of protesters trying to enter the offices of the ruling Syriza party and being pepper-sprayed by riot police: