Wednesday, October 19, 2011

Traveler's Alert: Strikes Nearly Shut Down Athens

As a follow-up to my recent postings on continuing disruptions in Athens specifically, and Greece generally, in-bound travelers are urged to evaluate to what extent travel to the Greek capital and elsewhere in the country will adversely affect their ability to move about the city. Those traveling to Athen today, tomorrow and Friday would be well-advised to delay travel until the weekend.

Earlier today, tens of thousands of protesters rallied in front of the Greek Parliament with infrequent pockets of violence ahead of a vote on a painful new round of austerity measures. Even the deployment of some 5,000 police officers in central Athens had any influence on escalating anger amongst protesters.

Many young protesters were carrying helmets and by early afternoon there were reports of clashes away from the main rally involving masked, black-clad youths hurling Molotov cocktails at police who responded with teargas canisters.

The 48-hour strike unfortunately has shut down most government departments, businesses and public services, as well as shops and bakeries. Some 150 domestic and international flights were canceled.

COMMENT: Prime Minister George Papandreou has unsuccessfully appealed for support from Greeks before parliamentary votes on the latest measures which include tax hikes, wage cuts and public sector layoffs.

Although Greece's powerful public and private sector unions have urged deputies to vote down measures proposed by the IMF and the EU, the fact is that without these steps being approved, Greece could financially collapse, as it has only sufficient funds to pay government workers through November.

Nevertheless, Papandreou's narrow four-seat majority is expected to be enough to ensure the austerity bill goes through, especially given possible support from a smaller opposition group. Trapped in the third year of deep recession and strangled by a public debt amounting to 162% of gdp which few now believe can be paid back, Greece has sunk ever deeper into crisis.

A first vote takes place late on Wednesday on the overall bill, which mixes deep cuts to public sector pay and pensions, tax hikes, a suspension of sectoral pay accords and an end to the constitutional taboo against laying off civil servants. A second vote on specific articles is expected some time on Thursday and only after that the bill becomes law. There has also been growing talk that Athens should be placed under tighter supervision by EU authorities to ensure it meets its reform obligations.

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