Wed September 28, 2011
More Trouble In Greece Ahead Of Debt Inspections
Greece's capital city was gridlocked Wednesday as mass-transit workers walked off the job for the third day this week over fresh austerity measures imposed by the government in hopes of securing crucial bailout funds.
The 24-hour strike left Athens without buses, subway trains, taxis or trams. Workers in customs and tax offices also walked off the job, and scores of retirees picketed outside the Finance Ministry to protest pension cuts.
Late Tuesday night, police fired teargas to break up demonstrations out side the Greek Parliament building after lawmakers passed a new tax on real estate.
The Return Of The 'Troika'
The latest wave of protests, which are expected to continue well into the fall, comes as international inspectors are due back in Athens for talks on Greece's plan to rein in its budget deficit. If the country is viewed as complying with targets set down in a $150 billion bailout deal last year, it will receive an $11 billion installment of funds needed to pay bills and salaries in October.
Inspectors from the so-called troika — the European Union, the International Monetary Fund and the European Central Bank — suspended their review of the country's finances early this month amid talk of budget shortfalls. As a condition for their return to the capital, the Greek government promised written assurances that it will carry out the austerity plan – a sign, commentators say, of how little international trust Greece has.
European Commission spokesman Amadeu Altafaj Tardio said the decision to go back to Athens "follows recent announcements by the Greek authorities concerning fiscal consolidation measures that constitute an important" development.
Once the fact-finding mission has made its conclusions, the finance ministers of the eurozone will organize a special meeting in October to assess them.
Merkel Says Not So Fast On New Bailout
Greece was saved from default last year by the international bailout deal, and European officials are working on approving a second bailout package.
Germany, Europe's most powerful economy, is expected to vote on the measure Thursday.
But German Chancellor Angela Merkel hinted that the second deal might have to be renegotiated amid increasing market speculation Wednesday that European leaders want to force private holders of Greek bonds to take bigger losses.
She didn't rule out altering the terms to the $148 billion package that EU leaders agreed to in July, saying the decision must be based on how the inspectors judge Athens' recent austerity efforts.
The planned second rescue package includes a voluntary participation by private bondholders, who agreed to write off about 20 percent on their Greek debt holdings.
But many economists and analysts maintain that Greece — mired in a deep recession worsened by the same austerity measures implemented in return for bailout loans — must have its total debt reduced by as much as 50 percent if it is to have a chance of recovering.
With reporting from Joanna Kakissis and NPR's Sylvia Poggioli in Athens. Material from The Associated Press was used in this story.