Tuesday, November 6, 2012

Greece: 50% of Greek Work-Force Announces 48-Hour Strike to Threaten Samaras on Bail-Out Vote

According to Reuters, hundreds of thousands of Greeks began an all-encompassing 48-hour strike on Tuesday (November 6) to protest against a new round of wage and pension cuts that Parliament is expected to approve by a narrow margin. This vote will be effected tomorrow, November 7.

Unfortunately, Prime Minister Antonis Samaras is caught in a huge squeeze between angry citizens on one side and vitally needed money from foreign lenders on the other, the latter of whom are demanding deeper cuts before Greece is bailed out.
The strike, called by Greece's two largest labor unions representing half of the four million-strong workforce, brought public transport to a virtual standstill and shuttered schools, banks and local government offices.
Parliamentary approval for the deal, which includes cutting pensions by as much as a 25%  and scrapping holiday bonuses, is needed to ensure Greece's EU/IMF lenders release more than 31 billion euros ($40 billion) of aid, much of it aimed at shoring up banks.
COMMENT: The sad part is that no matter what labor unions do to disrupt commerce, which negatively impacts on everyone's pocketbook, in the end, if Greece does not meet EU/IMF lenders' requirements, the country will not only default, but place the eurozone in further jeopardy, as Spain, Portugal and Italy continue to face credit downgrades.
Tragically, if the eurozone itself gets into deep water, the market impact on all global exchanges could be catastrophic, even in the US, Canada and Asia.
Business travelers to Athens should continue to prepare for major disruptions in transportation, blocked arteries and general commerce.