Greeks Protest Amid Recession

Sources:

FT: Greek Police Clash With Anti-Austerity Protesters
FT: Greece Mends Relations With EU and IMF
BBC: Greece General Strike: Clashes Erupt
NYT: Greek Protest of Austerity Drive Erupts in Violence
WSJ: Violence Flares Amid Greek Strike

An estimated 30,000 Greeks participated in strikes and protests in Athens on Wednesday, paralyzing the city. Government offices, schools, and banks were closed, and transportation was seriously disrupted as workers walked off the job in a 24-hour protest staged by Greece's two main labor unions, GSEE and Adedy, which have a combined 1.2 million members. Bus, trolley, tram, ferry, and subway operations were suspended, and, due to a four-hour walkout by air-traffic controllers, over 100 flights were cancelled.

The protesters were demonstrating against the government's extensive budget cuts and tax increases. The Socialist government of Prime Minister George Papandreou has been cutting government spending and raising taxes to reduce its staggering debt, which reached 15.9% of its gross domestic product in 2009. The austerity measures that the Greek government has implemented have come as part of a deal between Greece, the European Union, and the International Monetary Fund in exchange for a €110 billion ($150 billion) bailout. Greek officials recently criticized the terms of this loan, arguing that the "troika," i.e., representatives from the European Commission, IMF, and European Central Bank, are meddling in Greece's internal affairs. This criticism came after the troika proposed that Greece reduce its debt by selling off €50 billion of state assets. While some analysts have suggested that such a sell-off would make a significant difference in Greece's economic situation, many Greeks fear that some of Greece's cultural heritage could be sold to foreign investors. So far, the government has not sold any public entities, even though it pledged last year to sell stakes in public utilities and banks.

Since the economic downturn, the Greeks have been hit hard. According to the most recent data, Greece's recession has worsened. Last year, the Greek economy contracted by 4.5% and unemployment rose to 13.9%. According to one union leader, Greek workers are experiencing a "barbaric attack" on their rights. This frustration led to the protests on Wednesday, which ultimately turned violent as some protesters threw stones and firecrackers at police, who retaliated with tear gas and stun grenades. Another Greek proclaimed that workers’ anger and desperation are only increasing, and "if these harsh policies continue, so will we." This is the first Greek protest since last December, but it suggests that there may be a renewed sense of social unrest if Greece is unable to negotiate better loan terms with the troika, and according to one Greek official, it may spur a new round of protests.

Discussion Question: Does the Greek government have any choice other than to implement the changes that the troika has suggested? Are the Greeks warranted in their protest of this government action?