This week, Greek officials and monetary lenders continued negotiations over the austerity measures the country must implement to save itself from economic collapse.
Greece must pass a proposed measure that would cut public spending by 13.5 billion Euros in order to receive the next installment of its 173 billion euro bailout from international creditors: the European Commission, the International Monetary Fund and the European Central Bank -- known collectively as the troika. It’s crunch time in Greece; they are expected to be out of money by November so they must reach an agreement with lenders by the end of this month.
Rumor has it that negotiations have gone fairly well. Reuters quotes IMF Mission Chief for Greece Poul Thomsen saying late Tuesday that both sides came to agreement on “most policy issues.”
The lone holdup? Labor.
“There is an agreement on all issues except labor reform,” one senior official told Reuters. Greece’s two junior partners in their coalition government have vowed to vote down labor reforms proposed by troika, including reductions to pensions and salaries of public sector workers. Negotiations began in early September, and the unions have been sabotaging the process incessantly and senselessly. As Matt Patterson and I note in The Washington Times:
Greece’s public-sector unions are rioting in the streets and sacking the capital in protest of the government’s desperate attempts to save the nation from fiscal collapse, a collapse that is certain if things don’t change — soon.
Two of Greece’s largest public unions, representing half of the nation’s labor force, mobilized more than 50,000 teachers, air traffic controllers and other public-sector workers in their third 24-hour strike this year, bringing Greek life to a crashing halt. The unions vehemently oppose the austerity. In the place of budget reductions, they think Greece should default on a portion of its debt and take from the rich the money it needs to avoid bankruptcy. As Sotires Martalis, an Athenian high school teacher who was on the National Council of the Public Employees Union Federation, said of the unions: “Their main idea is ‘We don’t pay for your crisis, not even one euro. Take the money from the rich.’"
While public debt is expected to reach a staggering 179.3 percent of GDP in 2013 (Greece’s sixth year of recession) union officials continue to obsess over their bottom line. According to The Economic Times, IMF chief Christine Lagarde warned on September 22 that delays in implementing Greece's bailout program had increased the country's financial under-performance.
But unions don’t seem to care; they want their payout at any price. And if they win, all of Greece will lose.