Today’s general strike, called by the Greek General Confederation of Labour GSEE and the civil servants’ confederation ADEDY, is designed to protest the country’s 2012 budget which brings €7.1 billion in new regular and emergency taxes and heaps further cuts on pensions, wages and social spending.  The new budget plainly shows who is paying for the crisis and how injustice is piled on injustice. Wage earners and pensioners who in 2011 paid 55.5% of all taxes  (52.5% in 2008) are now being told to pay more while businessmen, if they pay at all, contribute only 28.6%  (30.8% in 2008).

GSEE president Yiannis Panagopoulos said:

“The government has changed but the unfair and ineffective recessionary policy hasn’t. As long as this policy continues and leaves social devastation in its wake, we will firmly oppose it.”

Despite the hardship imposed on its people, Greece will miss key deficit targets set by the “troika” for this year and the next. The economy will remain stuck in recession– revised at 2.8%, private consumption will fall by 4. 1% and investment by 7. 5%. Real unemployment will reach 26% in 2012 with 1.3 million unemployed not counting thousands of civil servants to be shortly dismissed as “labour reserves”.

In Greece, in 2011, teacher unions report that children fainting during classes in central Athens schools were diagnosed with starvation. Many children lack the basics and study in unheated homes.  Nonetheless, tax on heating oil has now been raised to the level of fuel oil and a litre of milk costs more here than in Brussels.

“Why do you protest all the time in Greece?” we are often asked. How could we not? When such injustice and devastation are wrought upon workers and their families trade unions, provided they can still mobilize, cannot remain in social apathy.

Greece is being pushed to its limits and we Greeks are being taken hostage for the rest of our lives. Indignation and despair have swept the country. In response, a 24-hour public sector strike on 5 October will be followed two weeks later on 19 October by a one day general strike called by the Greek General Confederation of Labour (GSEE) and the civil servants’ union ADEDY.

The first year of austerity shows that the medicine is worse than the disease. The conditionality of the EU-IMF loan mechanism traps Greece in a vicious circle where austerity breeds recession, followed by harsher austerity, new taxes and deeper recession. It has failed to put Greece’s finances on a sustainable route, or stabilize the eurozone. It has only produced recession. Clearly, without growth there can no budgetary improvement. On the contrary: unemployment and bankruptcies increase, tax revenue falls and the justified resistance of the people grows.

Ordinary Greeks face a tax tsunami including substantial VAT increases. It is suffocating the low paid, pensioners and other struggling families, yet the government appears unable to broaden the tax base or address tax evasion effectively. Workers are being made to pay for the crisis with each successive announcement.

The latest moves are on top of earlier, drastic budget cutbacks, lower wages, new taxes and a rapid programme of privatizations worth €50 billion: and this may not be the end, if the IMF/EU/ECB troika is not satisfied or – as has happened before, the Greek economy worsens.  The harsh, socially unfair measures are a precondition for emergency financial aid from the troika. They strangle any prospect of development and sustainability.

Unemployment is at unprecedented levels. The rate has doubled since 2008 to a fifth – over a million people out of work while 150,000 public jobs will be cut over the next two years. This is pushing Greece back to the 1950s, and it adds €5bn to the social security bill. Half of all young people are unemployed. Women are 50% more likely to be jobless than men, and austerity has widened the gender pay gap to 20%.

Inflationary pressures intensify, demand is falling sharply because of falling wages and small and medium sized enterprises, the backbone of the economy, are being forced into bankruptcy. Productive capacity is being destroyed.

The state’s obligation of social protection to the unemployed has been replaced with a higher than ever compulsory unemployment contribution from wages. Workers facing the threat of unemployment are effectively being asked to dig their own graves.

 The austerity measures have been adopted hastily under the pressure of financial markets, without any consultation with the social partners and regardless of the political and social impact.  The process of constructive social dialogue has been effectively stalled.

Greece is being turned into a laboratory for the restructuring of workplace and union rights. Industrial relations have been forced back at least two decades.

Over the last 12 months, more than 100 legal provisions have been enacted in a drastic restructuring of the labour market. Greece is being pressed to eliminate sectoral agreements that safeguard workers’ minimum rights and replace them by firm level contracts. Now any employer, under the threat of lay-offs, without giving a reason, can effectively force consent by a union to standards lower than those of the binding sectoral agreements. Equally he can unilaterally convert full–time work contracts to reduced term rotation work, the worst version of flexible employment, accounting for a fifth of all new contracts. Individual contracts are negating the very concept of collective bargaining.

But none of this is for Greece’s benefit. The EU-IMF strategy is designed to rescue eurozone banks from the impact of their irresponsible lending. The Greek debt crisis is surely rooted in domestic flaws. It has, however, become uncontrollable owing to the destructive drive of finance capital to maximize profits by betting on sovereign debt and the inability of the EU to articulate a coherent response.

As lasting social regression looms and bankruptcy beckons, the challenge is to reclaim our economy and our lives, protect workers and assert our role as trade unions.