Greeks Walk Off Job to Protest Overhaul to Pensions, Labor Laws

Greek unions staged their fifth general strike of the year, halting ferries, public transport and other state services to protest government plans to cut pension benefits and loosen labor laws.

The General Confederation of Labor, or GSEE, Greece’s largest union group for workers at private companies, and ADEDY, the civil servants’ organization, are holding a rally and march on parliament in Athens. The 24-hour stoppage includes maritime engineers at Piraeus, Greece’s largest port.

“We are faced with almost the totaling of Greece’s social security and labor system,” ADEDY Chairman Spyros Papaspyrou said by telephone. “We want the overturn of the harsh and anti- social measures and remain committed to this struggle.”

Greece is in the midst of its biggest upheaval since joining the euro nine years ago after being forced to take action to avoid a debt default. Reforms to pensions and the way workers are hired and fired are required by the European Union and International Monetary Fund in return for the 110 billion euros ($135 billion) of emergency loans agreed in May.

Greek pensioners on average live on 96 percent of the salary they had when they worked, more than twice the proportion of earnings as Germans, according to the Organization for Economic Cooperation and Development. The Paris-based group called the system a “fiscal time bomb.”

Companies are prevented from dismissing any more than 2 percent of their workforce in any given month, just as the Greek economy is mired in its first recession since 1993.

‘Doing Our Job’

“Striking is an irremovable right of the Greek people and of every worker, but we are steadily doing our job,” government spokesman George Petalotis said in an e-mailed transcript of comments made in Athens yesterday. Reforms must be pushed through “as the situation had really reached its limits.”

Ferry services at Piraeus, the gateway port to the Aegean islands, were disrupted by protesters.

The port strike, organized by PAME, the umbrella body for labor groups linked to Greece’s communist party, was called to demand changes to the “anti-social measures” being imposed, the Panhellenic Union of Merchant Marine Engineers said in a statement posted on its website.

The Piraeus district attorney ruled the strike illegal, Imerisia newspaper reported, without saying where it obtained the information.

Papandreou’s Measures

Prime Minister George Papandreou, whose union-backed Pasok party prevailed in elections last October, so far has reduced wages for state workers, trimmed some retirement benefits, and raised sales, fuel and alcohol taxes.

Papandreou, 58, argues the measures, to tame a budget deficit of 13.6 percent of economic output, are needed to prevent the country from defaulting on its debts.

Pension reforms include increasing the retirement age to 65 from 60 for women, curtailing early retirement, increasing the number of contribution years and calculating payments over a longer period of employment. The bill will be the first enacted since the May 6 package that pledged 30 billion euros of wage and pension cuts and tax increases over the next three years.

Labor Market

When it comes to the job market, the Labor Ministry plans to allow companies to fire 5 percent of their workers. Newcomers would be paid 84 percent of the minimum wage in a bid to boost employment among those aged between 15 and 29.

The unemployment rate for that group was more than 22 percent in the first quarter of this year compared with 18.5 percent last year. Greece’s main jobless rate rose in the first quarter to a 10-year high of 11.7 percent

“The main target of the new labor market law is to improve the flexibility in a market that’s considered, together with Portugal and to some extent France, as the most inflexible in the euro area,” said Nicholas Magginas, an economist at National Bank of Greece SA.

The GSEE union calls plans to cut severance pay, abolish terms of collective-bargaining agreements and raise the ceiling on firing workers an “assault” on workers.

The ASE Index declined 1.23, or 0.1 percent, to 1,445.92 as of 11:35 a.m. in Athens trading, on course for a sixth day of losses. Ten-year Greek government bonds yielded 812 basis points more than comparable German debt today, that so-called spread widening from 800 basis points yesterday.


The backlash in Greece has been evident all year. In parliament, three of Papandreou’s lawmakers rebelled over the May 6 package, leading the premier to expel them from Pasok. That left him with 157 lawmakers in the 300-seat chamber.

Three people were killed a day earlier after demonstrators set fire to a bank in Athens as protests and strikes became a daily event in the country.

Last week, members of the Communist Party-affiliated PAME union group prevented Greeks and foreign tourists from boarding ferries at the country’s largest port, just as the key summer season gets under way. Greece said it will pay for board and lodgings for tourists unable to leave the country because of industrial action or natural disasters.

Tourism is Greece’s largest industry accounting for about 16 percent of gross domestic product and around one in five jobs, according to the World Travel and Tourism Council.

Tomorrow, catering and tourist industry employees plan another 24-hour strike.

To contact the reporter on this story: Maria Petrakis in Athens at

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