Greek Workers Strike Again as EU Steps Up Pressure on Tsipras

  • Unions hold second general strike in less than one month
  • Tsipras asked to deliver on refugee crisis, bailout measures

Greek workers held the second general strike in less than a month on Thursday as Prime Minister Alexis Tsipras races to complete a new round of economic overhauls demanded by creditors in exchange for the disbursement of emergency loans.

“After six years of ruthless assault on workers’ and social insurance rights, the government is breaching its campaign trail promises, and continues the same heartless and catastrophic policy,” The General Confederation of Greek Workers, or GSEE, said in a statement calling for a rally in Athens. The protest drew about 15,000 demonstrators, according to police estimates.

As trade unions accuse Tsipras of advancing the same “social impoverishment” policies for which he was once accusing his political opponents, the 41-year-old leader needs to negotiate with creditors on a list of 13 so-called milestones that Greece has to meet in order to unlock 1 billion euros ($1.1 billion) in bailout loans. Tsipras also faces a threat from some European Union governments to suspend it from the passport-free travel system unless it tightens control of its borders.

A parliamentary vote on the previous round of measures triggered two defections from Tsipras’s governing coalition, whittling down his majority to just three seats in the country’s 300-seat chamber. Any more losses would put the survival of his government in doubt, after calls to opposition party leaders to offer consensus in the face of contentious overhauls attached to Greece’s bailout agreement, including pension reform, were rebuffed.

“We think it is unlikely Tsipras will be able to pass pension reform and keep his current government intact,” Mujtaba Rahman, an analyst at Eurasia Group, wrote in a note to clients on Wednesday, adding that the Prime Minister seems aware of the need to change the composition of his coalition. “But this will not be easy as despite Tsipras’s overtures towards the opposition, no leader has yet agreed to support him.”

Milestones List

The latest list of Greek reforms, which needs to be implemented by Dec. 11, includes measures ranging from new salary scales for civil servants, to the transfer of non-performing loans management to funds and non-banking ventures. Officials involved in the country’s program said that agreement for the disbursement of the outstanding tranche must be reached before the end of this year, as further delay would require parliamentary approval procedures in some euro area states, including Germany.

Hellenic Financial Stability Fund Chief Executive Officer Aristides Xenofos told reporters in Athens on Thursday that Greek banks, in which the fund is a main shareholder, can benefit from the expertise of third-party providers in the management of their sour loans portfolio. These arguments may not convince Syriza governing party lawmakers, who had opposed the transfer of loans to “vulture funds” while in opposition.

An official familiar with the matter said on Monday that creditors also demand legislation enabling non-banking institutions to buy loan portfolios from lenders, under licensing terms to be determined by the Bank of Greece. Unlike the management transfer, which will keep loans on the lenders’ balance sheets, full disposal will come with restrictions, including a ban on the sale of primary residence mortgages.

Immigration Crisis

More challenges remain for Tsipras as creditors work to complete the next review of the country’s bailout, which will pave the way for debt relief talks to commence. Before that, the government must convince European nations about the efficiency of its border controls in order to secure the country’s place in the continent’s passport-free travel zone.

European Commissioner for Migration and Home Affairs Dimitris Avramopoulos said in a statement to Kathimerini newspaper that Greece must improve border controls “substantially” before a summit of the bloc’s leaders on Dec. 17 in Brussels. “This will put an end to the theories about the collapse of the Schengen zone, or the country’s exit from it,” Avramopoulos said, referring to the EU’s borderless area, named after a town in Luxembourg, where the accord to abolish passport controls was struck 30 years ago. 

Even as arrivals on Greek islands slowed in the second half of November, amid bad weather that made crossing the sea from Turkey more dangerous, a record of more than 740,000 immigrants and refugees have made it to Greece this year, according to the United Nations. The crisis has stretched the country’s battered finances, following six years of recession that wiped out a quarter of its economic output and left public services struggling to cope with funding cuts.

According to Greece’s Migration Minister Ioannis Mouzalas, informal discussions have been taking place in the EU this week about suspending Greece from Schengen. The discussion originated from Hungary, and other countries with a similar approach to dealing with the refugee crisis, after last Sunday’s EU-Turkey Summit, Mouzalas told reporters in Athens. A draft proposal, designed to pressure Greece into allowing EU policing of its Aegean Sea border with Turkey, will be weighed by home affairs ministers of the 28 EU countries at a meeting in Brussels on Friday.

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