Concern that protests in Athens could be taste of worse to come

TRADE UNION MARCHES:ANGER WAS in the air yesterday morning in central Athens. With flags and banners flapping in the wind, tens of thousands of public-sector trade unionists marched past the country's neoclassical parliament building chanting their bitterness at government moves to target them with higher taxes to curb the state's spiralling debts.

“After 20 years on the job I only earn €1,300 [a month] and now the government wants to steal from me,” said Maria Ioakimidou, a middle-aged social worker at an Athens hospital.

“The big guys who stole in the past [through corruption] should be paying,” she added, referring to Greece’s rich elite.

Union leaders hailed the protests, which closed airports and disrupted schools, hospitals and local transport, as a show of strength. By evening, as news filtered through to Athens of the likely EU emergency measures to support Greece, there were fears that the demonstrations could be just a taste of much worse to come.

Athens argues that it has already tabled a package of painful austerity measures for Brussels’s approval, so there are worries that any tough new strings attached to emergency measures could spark social unrest.

Constantine Michalos, chairman of the Athens chamber of commerce, which represents more than 100,000 medium-sized businesses, said tax measures announced on Tuesday, which include a big tax rise on distributed dividends, “will take time to implement and that will add to the problems business and households already face. If they have to be tightened further you have the potential for social upheaval.”

Violent protests are not uncommon in Greece, as seen in 2008 when two weeks of riots erupted over the police shooting of a teenager.

Even ahead of the moves by the EU, trade unions had scheduled further strikes for later this month. These, they said, could easily be escalated amid increasing fears that incomes would be further squeezed following a 4 per cent across-the-board pay cut for all public-sector workers.

For Greek prime minister George Papandreou, the fragile mood in Athens underlines the challenge of maintaining public support as he tries to implement what is already the most ambitious reform schedule yet attempted by a Greek government. – (Copyright The Financial Times Limited 2010)