Greek dockworkers strike, Air Force pilots "sick" (News Feature)

By Christine Pirovolakis Apr 26, 2010, 22:13 GMT

Athens - Labour unrest spread from Greek docks to the Air Force Monday amidst growing protests against reforms aimed at boosting tourism and bringing the country out of its debt crisis.

Dockworkers blocked Greece's largest port, Pireaus, keeping crew and passengers from embarking, as the government raced against the clock for international aid to arrive in time to avert the eurozone's first default.

Hundreds of Greek Air Force pilots said they were too 'sick' to fly in what many officials say is an organized protest against higher pay cuts to bring the country out of its debt crisis.

On Tuesday, Athens public transport workers plan rolling strikes while the main civil servants' union, ADEDY, is planning a protest rally in the evening.

Saddled with huge debt and a swollen deficit, Athens bowed to intense pressure from financial markets last week to formally request activation of a 45-billion-euro (60-billion-dollar) EU-IMF aid plan, triggering what would be the first bail-out of a eurozone member.

The aid should be enough to see Greece cover its borrowing needs for this year, but the bailout plan has not solved the country's problems, with many analysts insisting that at some point in the near future the country will eventually default on its massive debt.

Greek media reported that European Union and International Monetary Fund officials, who are currently in talks with the country's finance ministry, had proposed further steps to slash public sector costs and boost competitiveness.

Among the additional measures are increasing the pension age to as high as 67 from an average of around 62 and scrapping the system of two extra monthly salaries a year as bonuses.

The new measures, which include lifting cabotage rules to allow non EU-flagged vessels to moor at Greek ports without hiring Greek crews, prompted Monday's port strike.

The striking dockworkers at Pireaus prevented more than 1,500 passengers and crew on the Panama-flagged cruise-ship Zenith from embarking and sailing for its scheduled destination to Croatia.

Hundreds of Air Force training flights were cancelled by the pilots' sick-out, which protested new tax measures. Although by law forbidden to strike, the pilots said that they were physically and psychologically not well enough to fly.

European and IMF officials have made clear that their support will require Greece to put its fiscal house in order.

Athens has agreed to begin an austerity programme to slash the budget deficit by 4 percentage points this year through cuts to civil servants' pay, pension freezes and increased taxes.

Growing uncertainty over whether Greece will receive an aid package in time to avert default pushed up borrowing costs to a record high on Monday.

The crisis has rippled across political Europe. German Chancellor Angela Merkel faced voter backlash in a key state election over the proposed bailout, and emphasized that the rescue was not a done deal but depended on Athens' producing 'a sound and credible' plan.

Germany's stance has annoyed other EU member states such as France whose President Nicolas Sarkozy has said that eurozone countries must secure the stability of their common currency.

Sarkozy and European Commission President Jose Manuel Barroso called for rapid action against speculation that targets Greece, to ensure the stability of the euro zone.

The gap between Greek and benchmark German 10-year bond yields reached a record 6.32 per cent Monday because of concern over the implementation of the aid package and the conditions attached.

Finance Minister George Papaconstantinou expressed confidence that Athens would secure some 9 billion euros in 10-year bonds expiring May 19.

'Until then our borrowing needs are secured but the market conditions right now are acting as a full deterrent from any new attempt to borrow,' he told Parliament.

He has said that he expects the IMF to approve the loan in the first 10 days of May and has played down concerns that Germany, might block the rescue deal.

Papaconstantinou said that if there are delays in getting parliamentary approval in some European countries, the IMF aid could be matched with bridge loans from European countries that already cleared the deal.

A poll released on Saturday showed that more than two-thirds of Greeks believe that Papandreou's government was either too slow to react to the crisis or handled the economy unwisely as the fiscal crisis deepened.