Greek lawmakers rush to clear promised austerity

February 22, 2012 RSS Feed Print

Greek stocks tumbled for a second day after the bailout deal, losing 5 percent shortly before market closing.

Even with the writedown, Greece's public debt will be reduced at best from euro368 billion ($487 billion), or nearly 170 percent of GDP last year to 120 percent in 2020 — around the level it was in 2009.

Greek retailers said Wednesday the prolonged austerity and recession were expected to cost another 100,000 jobs in the sector in the first half of 2012 alone — following 65,000 job losses in June-December 2011. About one employee is hired for every seven laid off.

More than one million Greeks, or 21 percent of the work force, were out of work in November.

The government is also cutting private sector wages, with the minimum monthly salary being reduced 22 percent to euro580 ($770) — and euro510 ($675) for workers aged under 25, an age group that suffers from 50 percent unemployment. Salaries are even lower for part-time employees.

Dimitris Asimakopoulos, head of General Confederation of Professionals, Craftsmen and Merchants, GSEVEE, presented a new study showing that 180,000 businesses are at risk of closing in 2012, with at least 61,000 expected to fail.

"The study reveals, with facts and figures, that we are unfortunately stuck in the mire of recession," Asimakopoulos said. "We will not emerge from this with wishful thinking about competitiveness and euro300 salaries."

Werner Hoyer, the new president of the European Investment Bank, told Germany's Handelsblatt newspaper that "Greece now needs, alongside the unavoidable austerity program, a Marshall plan too " — a reference to the U.S. aid plan that rescued an impoverished Europe after World War II.

Hoyer suggested that Greeks working in the European Commission and other EU bodies should be motivated to return home and help out, to avoid the impression that Greece "is under tutelage and directed by others."

But he said the structural reforms Greece needed could take up to two decades.

Police said some 6,500 people took part in two separate peaceful protests outside Parliament, called by the country's two main unions and a Communist union.

Braving a cold drizzle, protesters shouted "We can't survive on euro400," and "EU, IMF, out."

The rallies were heavily policed, as previous protests have turned violent. Rioters burnt and looted dozens of shops in central Athens during a rally on Feb. 12.

Papademos, who is unelected, has a sole mandate to see through the twin bailout and debt relief deal, and is expected to step down by early April ahead of national elections. Polls show that conservative New Democracy would likely come first, but without a large enough majority to govern alone.

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Derek Gatopoulos and Elena Becatoros in Athens, and Geir Moulson in Berlin contributed.