Greece cuts prompt union strike threat

GREECE’S biggest public sector unions voted for two days of strikes next month as its cabinet unveiled a new round of austerity measures.

The government is expected to lay off thousands of civil servants and will put another 30,000 into a “reserve army” – on permanent holiday with 60 per cent pay.

It will also cut the state pension by 20 per cent for those earning over €1,200 (£1,054) a month and reduce the income tax-free threshold from €8,000 to €5,000.

Greek finance minister Evangelos Venizelos told parliament that the country will do “anything” to get hold of its next €8bn instalment of bailout money.

He said: “The country will not cross into existential danger for [missing its target by] 0.5 or 1.0 per cent of output… We will do anything, we will not place at risk the fate of the country and its place in the Eurozone.”

However, he was unable to say how Athens will deliver on its promise to cut its deficit to 7.6 per cent of GDP this year. It is forecast to be around 8.5 per cent of GDP.

Venizelos needs to have a convincing plan to present to the troika – Greece’s international lenders, the ECB, European Commission and IMF – when he flies to New York next week if they are to release the €8bn in aid that will stave off bankruptcy for the sovereign next week.

Portuguese prime minister Passos Coelho warned yesterday that a Greek default would hit Lisbon hard.

“This could have disastrous consequences for Portugal, above all in terms of financing for banks and the economy,” he said.

But Yiannis Panagopoulos, head of Greek public sector union GSEE is not in a mood for compromise.

 “If the troika threatens Greek society with an [austerity] marathon, it should know that our answer will be a marathon of struggle,” Panagopoulos said.