The crisis in Greece is rapidly escalating as all sections of workers and peasants came out on the streets in three large rallies in one month to protest against their government’s decisions to curb inflation and manage the debt crisis by hard austerity measures. In January the government announced a Euro 4.8 billion austerity package which includes pension freezes, consumer tax hikes and cuts to civil servants pay. The cost of fuel and all consumer goods and services has gone up due to a hike in sales tax. The brunt of these measures fall on the working class, peasantry and poorer sections of Greek society.

Greece’s economy this time around started tottering from 2008 with the world recession and economic meltdown exposing its financial weaknesses. It is deeply in debt and there are doubts whether it can repay its loans. This has sent shock waves throughout the European Union as they all share the same Euro currency. Since 2009 the EU is trying damage control by giving Greece loans to prop it up and has demanded that Greece get its finances into order by slashing its budget deficit from approx 12.7 % of GDP to a more respectable 8.7% and 3% by 2012 and by drastically cutting its overall wage bill.

While the first round of workers’ strikes in 2009 were half-hearted the unions are now being forced by the angry public and workers to take a stronger stand against the new set of austerity measures announced in January 2010. The trade unions are in no way united and represent various political streams with the two main trade union federations, one representing the private sector General Confederation of Workers of Greece (GSEE) and one the public sector (Civil Servants’ Confederation (ADEDY). The GSEE with around 2 million members and the ADEDY with 80,000 represent about half of the total Greek work force of 5 million. Both these federations support the present Greek socialist government (PASOK) which represents Greek corporations and international finance capital and so they are not out to endanger it or the ruling elite. They used the strike on 12 and 16 March to channelise the discontent of the workers into less militant paths. Their rally on 12 March was 30,000 strong. The All-Workers Militant Front affiliated to the Communist Party of Greece took out a separate rally.

The strikes in March saw tens of thousands of protesters take to the streets, heavy clashes with the police, wide use of tear gas, arrests, and spread to practically every sector of the working class – transport workers, refuse collectors, civil servants, power sector, nurses, taxi drivers, pensioners, teachers, journalists and even some uniformed police officers and fire-fighters. Schools, airports, rail and road traffic, government offices, media and TV, archaeological sites, museums (tourism is the third largest income earner in Greece) all closed bringing the country to a grinding halt.

The government's crisis-management package is largely viewed as hitting the wrong people. People feel that the banks and rich are responsible for the problem and they should be made to pay for it not the common man. Instead Greece is reeling under high unemployment and higher price rise. From 15 March all goods will be even more expensive with the increase in VAT by 2% to 19%; civil servants will now face drastic slashes to their Easter and Christmas bonuses and there is a freeze on all employment and pensions.

What is angering the people is that the ruling socialist party was voted to power just five months ago on the promise to help the poor who are facing Greece’s first recession in 16 years. But Greek PM Papandreou says that Greece has to tackle a crippling debt mountain that has reached 300 billion euros ($405.7 billion), roughly 125 percent of Greek GDP. Just in 2010 Greece has to pay debts to the tune of 54 billion Euros. In February the IMF and EU commissions sent experts to evaluate the situation which they found grim and they foretell a much deeper recession and higher borrowing costs. Papandreou promptly extended a public sector wage freeze to those earning below 2000 euros a month and banned all seniority pay hikes.

All the unions are planning to intensify the fight and are making plans for strikes in the coming months. Meanwhile the EU is worried because EU nations share a common currency and the Greek virus might spread to the other countries. Portugal, Spain, Ireland are also teetering on the brink of similar economic-political crises with workers' strikes and peoples’ protests becoming a daily reality: market analysts are using the acronym PIGS (Portugal, Ireland, Greece, Spain) to refer to these tottering economies!

The tragedy of Greece in post World War II history is that three times it has had the chance to really change society to a more equitable one but each time, three generations of rulers from the Papandreou family have betrayed the promise of change!