Fresh strikes to hit Greece

City A.M. Reporter
GREEK unions yesterday announced they would stage a 24-hour nationwide strike on 20 May, the second major protest against tough austerity measures pledged in exchange for billions of euros in aid.

The main public and private sector unions led a 50,000-strong march a week ago in which hundreds of angry Greeks fought pitched battles with police in the streets of central Athens and three people were killed in a petrol bomb attack on a local bank.

Investors are closely watching public reaction to government wage and pension cuts amid concerns broader unrest could hit Prime Minister George Papandreou’s resolve in pushing them through.

The austerity measures, pledged in return for €110bn (£93.6bn) in emergency aid from the European Union and International Monetary Fund, are expected to keep the economy in recession through 2011.

The country’s socialist government on Monday unveiled a draft law to raise the average retirement age and cut benefits, which further angered unions already opposed to previous steps including public wage cuts and tax hikes.

•Meanwhile, new figures published yesterday showed Greece’s economy contracted 0.8 per cent in the first quarter compared to the last three months of 2009. Analysts forecast the contraction of the Greek economy would accelerate. The overall Eurozone grew for the third quarter in a row – by 0.2 per cent in the latest three months. Compared to the first quarter of last year, GDP was up 0.5 per cent. Stocks, encouraged by the muted economic growth and the tough Spanish austerity package, gained yesterday. The FTSE Eurofirst 300 added 1.3 per cent to 1,048.54.