Farmers blocked roads and ferry services were disrupted in Greece on Wednesday as popular opposition mounted to the Syriza-led government’s plans for a fresh round of pension reforms.
Hundreds of farmers used tractors to stop the traffic on large roads across the country and the second day of a 48-hour strike by seamen led to the cancellation of ferries to the Greek islands. Self-employed professionals including lawyers, engineers and doctors also announced plans to protest in central Athens on Thursday followed by a march to parliament.
The protests came as Alexis Tsipras, prime minister, was due to participate in a panel discussion at the Davos economic forum alongside Wolfgang Schäuble, the German finance minister. Athens has been pushed to implement further reforms agreed last year in return for a €86bn third bailout.
Pierre Moscovici, the EU’s economic affairs commissioner, also warned on Wednesday that Greece would have to improve proposed cuts to pensions if it wanted to begin long-awaited negotiations on debt relief.
“We need first to have that pension reform — I want that to happen as fast as possible,” Mr Moscovici said in an interview with Bloomberg News agency.
The pensions issue has threatened to derail Greece’s bailout programme, with the International Monetary Fund — one of the “troika” of bailout monitors along with the European Commission and European Central Bank — insisting that deep cuts are needed to rescue the underfunded state pension system.
Athens is proposing a temporary solution to cover the projected €600m pension shortfall in this year’s budget by increasing employers’ contributions and reducing special benefits. Mr Tsipras insists main pensions will not be cut, while leaving open the possibility of reductions in supplementary benefits for the wealthiest retirees.
Greek farmers also face an additional government measure that will double the income tax they pay.
Syriza came to power a year ago with a pledge to reverse 11 separate cuts to pensions since Greece was plunged into a deep recession in 2010 — cuts that have reduced the average pension by 40-45 per cent.
But a persistently high unemployment rate of almost 26 per cent has slashed government income from workers’ social insurance contributions. Spending has also soared as thousands of public sector workers opted to take early retirement before a reform took effect that raised the retirement age to 67 for almost all employees.
“There is a fear that the contributions base of social insurance in Greece is fast dissolving,” said Platon Tinios, a pensions expert and visiting fellow at the London School of Economics.
The Tsipras government has called for a temporary rise in employers’ contributions of about 1.5 per cent to keep the system afloat until the economy resumes sustained growth. While the Hellenic Federation of Enterprises, which represents larger employers, has agreed to the rise, critics claim that struggling businesses will instead opt to sack workers and rehire them as “black labour” without paying social insurance.
Self-employed professionals, whose pension funds have slid deep into debt, say the proposal will destroy their practices. “We are already reeling from years of recession. If the proposals go through, professionals like me in mid-career will be hard pushed to cover their family expenses,” said Athanasios Bitros, an engineer.
Hit by the double-whammy of tax increases and cuts to pensions, the Greek farmers plan to escalate their protest by setting up 24-hour roadblocks on main roads and border crossings. Giorgos Makripidis, a Greek cereals grower, said the government’s proposals would “wipe out many professional producers and reduce them to the level of subsistence farmers”.
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