Greece hit by new strikes in protest at planned bailout measures

Public transport, schools, rubbish collection services and broadcasters across Greece were paralyzed by strikes on Friday as trade unions protested against reforms demanded by the country's creditors in return for bailout aid.

Athens and its creditors have struggled for months to agree on reforms and cost-cutting measures that would allow the cash-strapped country to continue receiving bailout aid. There are concerns that Greece is once again nearing the brink of bankruptcy.

Eurozone finance ministers will hold a special meeting of their Eurogroup panel on Monday afternoon to review the negotiations' progress.

Ahead of that meeting, the Greek parliament is due late Sunday to vote on most elements of a reform package required of Athens, totalling 3 per cent of Greece's gross domestic product (GDP).

The vote was brought forward from Wednesday to strengthen the hand of Greek Finance Minister Euclid Tsakalotos in Monday's Eurogroup talks, according to government sources in Athens.

But Greek media reported that the measures could be a tough sell in parliament, where the left-right coalition of Prime Minister Alexis Tsipras has a narrow majority of 153 lawmakers out of an overall 300.

One of the most controversial aspects are planned cuts to retirement benefits, which the GSEE trade union described as the "tombstone" of the pension system.

On Friday, ferries to Greece's Aegean islands were not running, and neither were trains and local transport in Athens and other cities. Television and radio broadcasts were limited to music and films as journalists stopped working. The strikes are set to continue for several days.

Greece's latest bailout negotiations have been further complicated by creditors demanding a set of new cost-cutting measures that would be implemented if Greece's finances go awry.

The creditors would like them to total 2 per cent of GDP, or about 3.5 billion euros (4 billion dollars) - on top of the previously required package of reforms and cost-cutting measures.

The extra measures "provide insurance against unforeseen events," Klaus Regling, the head of the eurozone's bailout fund, said in an interview with Italian daily Corriere della Sera published Friday.

"Greece believes ... that those measures will not be necessary," he added. Tsakalotos has warned that a contingency approach would prove challenging to implement under Greek law.

The two packages would clear the way for the next tranche of aid to be disbursed under Greece's third, 86-billion-euro bailout.

A highly anticipated discussion about further debt relief for Athens also needs to be held.

"These are not easy topics. It requires a lot of energy, a lot of work, but I think that there is a way [to succeed]," EU Economy Commissioner Pierre Moscovici said on Tuesday.

Greece is facing large debt payments this summer, with 3.66 billion euros due to the International Monetary Fund, the European Central Bank and other creditors in July.

Regling downplayed fears that Greece could be close to a default, while noting that there is a "real need for liquidity" at the end of July. "The sooner we get an agreement, the better," he said, adding that this would help the country pay its domestic arrears.

Expectations of a breakthrough at Monday's Eurogroup meeting were being downplayed earlier this week, with sources in Brussels saying that the aim was to reach a deal at the following Eurogroup meeting, on May 24.

Last update: Fri, 24/06/2016 - 08:49
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