Greek workers strike; Spanish protests growing

Rick Moran
The euro zone's too biggest problem children - Spain and Greece - are under seige as protests against Prime Minister Rajoy's austerity budget rock Spain and Greek workers go on strike, nearly shutting down the country.

Reuters:

Violent protests in Madrid and growing talk of secession in wealthy Catalonia are piling pressure on Spanish Prime Minister Mariano Rajoy as he moves closer to asking Europe for rescue money.

Rajoy has been resisting calls from influential domestic bankers and the leaders of France and Italy to move quickly to request assistance, but a series of events this week will drive him closer.

With protesters stepping up anti-austerity demonstrations, Rajoy presents more painful economic reforms and a tough 2013 budget on Thursday, aiming to persuade euro zone partners and investors that Spain is doing its deficit-cutting homework despite a recession and 25 percent unemployment.

Fresh data on Tuesday suggested Spain will miss its public deficit target of 6.3 percent of gross domestic product this year, as the central government deficit reached 4.77 percent at the end of August, already higher than the year-end target.

By front-loading the reforms Rajoy hopes to sell them to voters as home-grown rather than conditions imposed from outside. Diplomats reported intense last-minute pressure on Madrid from key euro zone policymakers to take tougher measures, notably on freezing pensions.

On Friday, Moody's will publish its latest review of Spain's credit rating, possibly downgrading the country's debt to junk status.

More than half of Catalonians - the rich region in the north - want independence from Spain because they believe they bear an inordinate tax burden compared to the rest of the country. As Rajoy inches toward a bailout, things could hardly be more chaotic.

Meanwhile, the Greeks are being Greeks:

Greek workers have begun their first mass confrontation with Greece's three-month-old coalition government, grounding flights, disrupting local transport and shutting public service offices.

The general strike is being backed by the country's biggest private sector force, the General Confederation of Greek workers (GSEE), the union of civil servants (ADEDY), and militant unionists attached to the KKE communist party.

All three groups are holding hold mass demonstrations in Athens - and some 65 cities and major towns nationwide - before protesters march on the Greek parliament.

"We call on everyone to take part in the strike and resist the austerity measures that hurt Greek people and the economy," said unionist Despina Spanou of ADEDY. "This strike is only the beginning in our fight."

The traditional summer break has allowed the conservative-led government of prime minister Antonis Samaras to enjoy relative calm on the streets since taking power in June.

About 3,000 police officers - twice the number usually deployed - are standing guard in the centre of Athens as authorities brace for the rioting that has marked past rallies. Athens last witnessed serious violence in February, when protesters set shops and banks ablaze as parliament approved an austerity bill.

Total disconnect. They expect the rest of Europe to pay for their government's past extravagances. How else is the Greek government going to get the money to pay their debts? If Greece were forced to go to the open market to finance their debt, the cost of borrowing would simply be unsustainable and the country would be far worse off economically than if the governmenbt adopts the admittedly painful but necessary austerity measures.

Reality apparently won't set in until there is a total collapse. By then, of course, it will be too late for the Greeks to do anything except brace themselves for the upheaval that is sure to follow.



The euro zone's too biggest problem children - Spain and Greece - are under seige as protests against Prime Minister Rajoy's austerity budget rock Spain and Greek workers go on strike, nearly shutting down the country.

Reuters:

Violent protests in Madrid and growing talk of secession in wealthy Catalonia are piling pressure on Spanish Prime Minister Mariano Rajoy as he moves closer to asking Europe for rescue money.

Rajoy has been resisting calls from influential domestic bankers and the leaders of France and Italy to move quickly to request assistance, but a series of events this week will drive him closer.

With protesters stepping up anti-austerity demonstrations, Rajoy presents more painful economic reforms and a tough 2013 budget on Thursday, aiming to persuade euro zone partners and investors that Spain is doing its deficit-cutting homework despite a recession and 25 percent unemployment.

Fresh data on Tuesday suggested Spain will miss its public deficit target of 6.3 percent of gross domestic product this year, as the central government deficit reached 4.77 percent at the end of August, already higher than the year-end target.

By front-loading the reforms Rajoy hopes to sell them to voters as home-grown rather than conditions imposed from outside. Diplomats reported intense last-minute pressure on Madrid from key euro zone policymakers to take tougher measures, notably on freezing pensions.

On Friday, Moody's will publish its latest review of Spain's credit rating, possibly downgrading the country's debt to junk status.

More than half of Catalonians - the rich region in the north - want independence from Spain because they believe they bear an inordinate tax burden compared to the rest of the country. As Rajoy inches toward a bailout, things could hardly be more chaotic.

Meanwhile, the Greeks are being Greeks:

Greek workers have begun their first mass confrontation with Greece's three-month-old coalition government, grounding flights, disrupting local transport and shutting public service offices.

The general strike is being backed by the country's biggest private sector force, the General Confederation of Greek workers (GSEE), the union of civil servants (ADEDY), and militant unionists attached to the KKE communist party.

All three groups are holding hold mass demonstrations in Athens - and some 65 cities and major towns nationwide - before protesters march on the Greek parliament.

"We call on everyone to take part in the strike and resist the austerity measures that hurt Greek people and the economy," said unionist Despina Spanou of ADEDY. "This strike is only the beginning in our fight."

The traditional summer break has allowed the conservative-led government of prime minister Antonis Samaras to enjoy relative calm on the streets since taking power in June.

About 3,000 police officers - twice the number usually deployed - are standing guard in the centre of Athens as authorities brace for the rioting that has marked past rallies. Athens last witnessed serious violence in February, when protesters set shops and banks ablaze as parliament approved an austerity bill.

Total disconnect. They expect the rest of Europe to pay for their government's past extravagances. How else is the Greek government going to get the money to pay their debts? If Greece were forced to go to the open market to finance their debt, the cost of borrowing would simply be unsustainable and the country would be far worse off economically than if the governmenbt adopts the admittedly painful but necessary austerity measures.

Reality apparently won't set in until there is a total collapse. By then, of course, it will be too late for the Greeks to do anything except brace themselves for the upheaval that is sure to follow.