Greece pushes on reform as crucial EU summit to take place on Friday

Guardian
February 2, 2011

Greece's beleaguered government, which as been buffeted by a barrage of strikes, faces one of its toughest tests yet as it prepares to pass reforms seen as pivotal to the country's economic recovery.

Ahead of Friday's crucial EU summit, George Papandreou, the prime minister, has come under increasing pressure from unions and the professions. Both groups are vowing to step up their protests against the unprecedented efforts to liberalise the economy.

Dimitris Reppas, the transport minister, appealed for calm and said striking employees would feel the "full force of the state" if they did not return to work. "We all have to give up something so that Greece comes out on top," he said.But the crippling action shows no sign of letting up even as EU and International Monetary Fund officials grill Athens over the progress it has made in adopting policies demanded in return for their €110bn (£95bn) bailout of the country last year.

A week after the socialist government presented draft legislation aimed at opening up some 150 "closed-shop" occupations – a key condition of the emergency aid – public transport workers, pharmacists, civil engineers, doctors and lawyers have all walked off the job citing loss of hard-won rights. Sweeping away the laws that have kept Greek labour costs artificially high, protected professions and contributed to the nation's lack of competitiveness is essential to resuscitating an economy teetering on bankruptcy.

One thinktank in Athens estimated that Greece's GDP would increase by more than 12% once the economy is reformed. The country's international creditors have signalled that unless the reforms are passed, it risks losing the next instalment of aid.

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