Greece falls again back into recession
Mass protests against new austerity measures turn violent
19 May, 2017
Greece has fallen back into recession for the first time since 2012, official figures from Eurostat show. The country's GDP fell by 0.1% in the Q1 after shrinking by 1.2% in the final quarter of 2016. According to Markit's chief economist Howard Archer, Greece's return to recession was largely due to uncertainty over the bailout. “Encouragingly, agreement between Greece and its lenders on reforms was agreed in early May. With EU creditors now expected to finally sign off on Greece's latest injection of rescue cash, the Commission expects growth to bounce back to 2.6% this year,” he said
The figures came as unions begin two days of protests and strikes against pensions cuts and tax rises insisted on by creditors as the country is still struggling to secure a new bailout from international lenders. Athens hopes the loan payment will be approved by the Eurozone finance ministers at their meeting on 22 May. Greek ferries and news services were disrupted last Tuesday, while a 24-hour general strike last Wednesday further disrupted transport and public services. An anti-austerity rally in Athens last Wednesday evening turned as a general strike halted flights, ferries and public transportation, and thousands joined protest marches across the country. A small group of protesters threw gasoline bombs and fired flares at riot police after peaceful marches involving around 12,000 people ended. Police responded with tear gas. In a separate evening protest, more than 3,000 police, firefighters and coast guards angry at impending pay cuts gathered outside parliament chanting slogans.
The protests occurred as lawmakers were set to approve another batch of reforms that will impose years more hardship on austerity-weary Greeks. The new belt-tightening measures that will be imposed beyond the end of Greece's third bailout next year, include pension cuts and tax hikes. The left-led coalition government agreed to the cuts as part of a deal with the country's international creditors to release bailout funds. Unless funds are unlocked, Greece would once more struggle to meet a spike in debt repayments due this summer and face bankruptcy.
In parliament, lawmakers were debating the measures that include additional pension cuts in 2019 and higher income tax from 2020. On the streets of Athens, opinions on the strike diverged. “It doesn't make a difference whether you strike or not. All the measures will pass anyway,” said an Athenian as he walked in the city centre. But another disagreed. “Every strike is a holy thing. If we dismiss it, surely we'll end up getting €300 salaries and €200 pensions,” he said. Unions and the opposition compared the new measures to those of a fourth bailout, but without the corresponding funding from international creditors, while the government rejected the accusation.