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Greeks protest before 2011 austerity budget vote

22 December 2010 18:40 (UTC +04:00)

Baku â€“ APA. Thousands took to the streets of Athens on Wednesday to protest against the 2011 Greek budget which imposes yet more austerity on the debt-choked nation, but parliament was set to pass the bill later in the day anyway, APA reports quoting â€œReutersâ€.
Public transport ground to a halt in the capital as about 3,000 protesters rallied peacefully in front of parliament shouting "We can’t take it any more."
"We have no hope, we are just drowning," said Apostolos Kostopoulos, 46, a technician at the Public Power Corporation, whose salary was cut. "Parliament is voting today on a budget that will plunge people deeper into poverty," he said as others waved a large Greek flag covered with "For Sale" tags.
Another 2,000 people joined a separate anti-austerity march, but overall turnout was much smaller than in previous protests. Some Greeks questioned the point of countless strikes and marches this year which have failed to divert the government from an austerity path demanded by the nation’s EU/IMF bailout.
"We don’t agree with austerity, but nothing is going to change. The government will not change policies just because we take to the streets," said 43-year-old secretary Susanna Apostolaki.
The new spending cuts and tax rises in next year’s budget have failed to calm fears about Greece’s ability to pull itself out of a debt crisis that has shaken the entire euro zone. Fitch agency said late on Tuesday it may cut the country’s credit rating next month to junk.
The 2011 budget includes more tax increases and wage cuts in state companies to put Greece back in line with terms of the EU/IMF bailout agreed in May, after some slippages this year.
Analysts say the additional austerity will hurt the recession-bound economy even more without guaranteeing the country will avoid a debt restructuring.
The main public and private sector Labor unions had called workers to walk off the job from 1000-1300 GMT in the Athens region, but no official estimate of participation was available.
The government holds 156 seats out of 300 in parliament and the budget is expected to be approved despite growing discontent among the ruling PASOK party ranks.
RECESSION-HIT RETAILERS
Greek bond and stock markets were little changed on Wednesday after the Fitch warning. "It seems the market has already discounted the downgrade," said Vasillis Vlastarakis, analyst at Beta Securities in Athens. "Even if it happens, it won’t have a great effect on the market."
The move would bring Fitch’s rating in line with Moody’s and Standard & Poor’s, who already have sub-investment grade ratings on the country, and both are on review for further downgrades.
Greek bank stocks were down less than 1 percent but had dropped 5 percent on Monday on rumors of a Fitch downgrade.
Athens bus and subway drivers have been holding on and off strikes for two weeks and will not work at all on Wednesday, keeping Christmas shoppers from the city center and adding to the strain of recession-hit retailers.
The government threatened to break the transport strikes with emergency legislation it used earlier this year to end action by truck drivers and other transport workers.
The socialists, who revealed a gaping budget deficit after coming to power last year, have braved public discontent and taken draconian measures to meet the bailout terms.
This year, the government has already cut public sector wages by about 15 percent, increased the retirement age, frozen pensions and cut public spending. But it has failed to boost tax collection as much as targeted, despite a hefty VAT increase.
Partly as a result of the measures, the economy is forecast to shrink 3 percent next year after a 4.2 percent drop in 2010, with unemployment jumping to a record 14.6 percent from an estimated 12.1 percent this year.
Greece targets a budget deficit of 7.4 percent of GDP next year, down from about 9.4 percent this year.