Vol. 74/No. 9      March 8, 2010

Socialist prime minister George Papandreou, who won election in October, said he will freeze government workers’ wages, slash bonuses 10 percent, increase taxes on fuel, alcohol, and tobacco, and cut other government spending. Another round of austerity measures will be announced by early March.

In late January, Papandreou told the World Economic Forum in Davos, Switzerland, that he was prepared to “draw blood” to establish Greece’s financial credibility and avert defaulting on loans. Government debt in Greece is 120 percent of the country’s gross domestic product. Some $75 billion comes due starting in March.

The latest figures show that official unemployment in Greece is at 10.6 percent.

Before they provide more loans to Athens, leaders of the European Union, especially the German government, want Papandreou to take deeper austerity measures to ensure that wealthy bondholders and banks get their payments. In spite of the symbolic nature of union protests so far, European Union (EU) leaders are not confident that the Greek rulers will be able to impose the measures on working people there.

Workers in Greece, along with those in Portugal, are the lowest paid workers in the euro zone, the 15 countries that use the euro as their only currency within the European Union.

Along with Greece, other weaker capitalist nations in the EU—Portugal, Italy, Ireland, and Spain—have also been hard hit by the worldwide economic crisis.

In January, Italy’s national statistics office announced official unemployment there reached 8.3 percent in November, the highest in more than five years. Industrial output in Italy plunged 17.4 percent in 2009. Rome’s public debt is now the third highest in the world, behind only Washington and Tokyo.

In Portugal, official unemployment is more than 10 percent. Although opposition parties defeated an austerity bill, the ruling Socialist Party vowed to find ways to implement parts of the plan. Portuguese unions have called for a strike March 4 to protest a wage freeze for government workers.

Spain, with the fifth largest economy in the European Union, has the highest unemployment rate. Unemployment among youth between the ages of 16 and 25 is at 40 percent. Collapse of the housing bubble there has left 800,000 newly built homes empty.  
 
‘Comfortably unemployed?’
The New York Times complained February 18 that government-paid benefits have created a class of “comfortably unemployed” in Spain. The “generous” amount? Twenty-five percent of a worker’s wage. According to the paper, Spanish companies must pay fired workers 45 days severance for each year worked.

The Times noted that so far Madrid has been unable to significantly slash the social wage in Spain. However, it said, “Some argue that as a socialist, Mr. Zapatero [the Socialist prime minister] is in a better position to tackle reform than are the conservatives.”

The two main union federations in Spain, one led by the socialists and the other by the Communist Party, have called regional protests beginning February 23 to protest Zapatero’s proposal to make Spain one of the first in the European Union to raise the retirement age to 67, along with changing how benefits are calculated.

Union officials are hoping to use the protests to maintain their authority without seriously challenging the government. Although the Socialist-led UGT federation opposes most of the retirement proposals, “the discontent is almost more with its form than the content,” reported the daily El País.

As the capitalist economic crisis unfolds, trade tensions are also sharpening.

On February 4 the EU extended tariffs on shoe imports from China and Vietnam for another 15 months. There are some 350,000 workers in the shoe industry in Spain, Portugal, and Italy.
 
 
Related articles:
Washington takes aim at social programs  
 
 
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