STRIKES BRING GREECE TO STAND STILL - SOCIAL

UNCLAS ATHENS 000433

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E.O. 12958: N/A
TAGS: PGOV PREL ELAB ECON SOCI GR
SUBJECT: STRIKES BRING GREECE TO STAND STILL - SOCIAL
SECURITY REFORM ON TRACK
REF: ATHENS 400

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SUMMARY
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1. (SBU) Private and public sector unions continued their
ongoing strike against government-sponsored social security
reforms today, a situation which has essentially brought
most of the country to a stand still. Professionals from
the ranks of lawyers, doctors, engineers, and teachers
joined electricity workers in the protest against the
government's pension reform bill intended to streamline a
fragmented and deficit-ridden system. Demonstrations will
culminate at the Parliament tonight, March 20, when the
government's bill on social security reform is expected to
pass. While passage represents a government success over
the stalwart unions, this is but one battle in a war to
liberalize Greece's economy. End Summary.

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Strikes Bring Greece To A Stand Still
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2. (U) Unions announced a 24-hour nationwide general
strike for March 19, 2008, effectively paralyzing the
country; most unions continued the strike on March 20, in
light of the planned government vote on social security
reform that day. Electricity workers continued their
strike for the second week, joined by lawyers, doctors,
engineers, teachers, and other professionals on March 17.
Unions organized a rally at central Athens on March 19 and
will demonstrate at the Parliament on March 20. The
country continues to be plagued by electricity
interruptions, remaining piles of garbage (sanitation
workers returned to work Monday after more than a week on
strike),limited banking operations, and serious
transportation woes. Strikes are expected to dwindle after
March 20, when the social security bill is expected to pass
in Parliament. With opposition parties and unions refusing
to enter into a dialogue with the government on this issue,
the bill is expected to pass without significant challenge
or revision. The opposition and unions continue to demand
the government withdraw the bill.

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Social Security Reform Touches All
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3. (U) The social security reform bill seeks to streamline
Greece's fragmented and deficit-ridden pension system by
slashing Greece's 133 pension, health and provident funds
now overseen by the labor ministry for private sector
workers to just 13 umbrella funds; it raises the effective
retirement age for women and working mothers; uses
incentives and disincentives to keep employees working
longer; establishes a new super-fund to help cover the
pension needs of workers retiring after 2019, and caps the
payouts of so-called supplementary pensions that retirees
collect over and above their main pensions. The plan also
proposes several secondary reforms aimed at further
improving the functioning of the system, such as the
introduction of a single pension and health care
identification number, to be brought in by mid-2009. At
the end of the day, the measures will affect the vast
majority of Greece's professionals and private and public
sector workers.

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Comment
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4. (SBU) Although the strikes witnessed an unparalleled
level of participation and managed to bring the country to
a stand still, unions appear to be unable to break the
government's will and block passage of the social security
reform bill. However, workers and professionals appear
convinced that very soon they will see their social
security perks diminished or eliminated. Recent opinion
polls indicated that 71 percent of those questioned opposed
the reforms and 69 percent supported the strikes. If the
government does not proceed with additional economic
liberalization reforms and take measures to reverse the
negative climate, its likely social security reform bill
triumph could become a pyrrhic victory.
SPECKHARD