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December 22, 2010 at 11:41 AM
A general strike hit Greece as unions fought the additional austerity measures called for in the budget that was approved by the parliament Wednesday night. Reuters reported that the budget contains additional tax hikes over those already enacted, as well as wage cuts in state enterprises such as public transport.
In protest, all public transport was stopped for 24 hours, bringing Athens to a standstill. Public and private sector labor unions also called a 3-hour strike in Athens, and thousands were expected to demonstrate outside parliament. Intermittent strikes by bus and subway operators have kept Christmas shoppers away from Athens’ recession-stressed retailers.
Already-stringent measures to combat the nation’s debt crisis have resulted in harsh cutbacks for Greek citizens, including cuts in public spending and a 15% cut in public sector wages; pension freezes; and an increase in the retirement age. The measures have helped to bring about a shrinking of the economy by 4.2% in 2010, and a further shrinkage of 3% is expected in 2011, making the prospects of recovery dim. Currently the unemployment rate hovers at 12.1%; in 2011 it is expected to hit 14.6%.
Fitch Ratings, heaping on the bad news, said Tuesday that it expected to cut Greece’s credit rating to junk status. It will thus join Moody’s and Standard & Poor’s, which have already applied the junk label to Greece’s rating—the only country in the euro zone thus graded. Fitch, which had placed the country under review, originally expected its evaluation to be completed by the end of 2010; in a short statement, it said instead that results of the review would now be completed in January of 2011.
