Sunday, October 16, 2011

Traveler's Alert: Athens Expected to Come to a Standstill This Week

Inbound visitors to Athens and Thessaloniki are cautioned that continuing strikes and labor slowdowns are expected to bring Greece's two largest cities to a screeching halt this week. Hence, those planning to travel to Greece this week may want to either defer optional travel or be prepared to be very self-sufficient while there, as Parliament prepares to vote on a sweeping package of austerity measures demanded by international lenders.

Greece's two main unions, representing about half of the four million-strong workforce, have promised one of the biggest strikes since the start of the crisis two years ago, hitting food and fuel supplies, disrupting transport and leaving hospitals run by skeleton staff. Despite the strikes, Prime Minister George Papandreou has defied the protests, pledging to push through a deeply unpopular package that includes tax hikes, pay and pension cuts, job layoffs and changes to collective pay deals. Unfortunately, he may have no choice in the matter if Greece is to survive fiscally.

COMMENT: Trapped in a very deep recession and strangled by a public debt equivalent to 162% of gdp, Greece has been shut out of bond markets and would run out of money within weeks without international support. Inspectors from the EU and International Monetary Fund were in Athens last week and have recommended releasing a vital 8 billion euro aid package to enable the government to keep paying its bills past November.

With memories still fresh of the violent clashes between riot police and anti-austerity demonstrators in June, police will be taking extra precautions to crack down on signs of trouble during the strikes this week.

The strikes this week will directly affect public sector institutions including tax offices, state schools and airports as well as banks and businesses ranging from taxis and clothes shops to suppliers of everyday staples like bakers. Even the country's judges will hold indefinite stoppages, only issuing rulings on major cases. Customs officials, who clear fuel refinery deliveries may hold a 24-hour strike on Monday and will decide whether to extend their action, potentially hitting fuel supplies.

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