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Page last updated at 15:52 GMT, Thursday, 17 December 2009

Greece left-wing unions protest against spending cuts

Workers march through Athens, 17 December 2009
Dozens of demonstrations were to be held across Greece on Thursday

Left-wing trade unions in Greece have protested against spending cuts aimed at restoring international confidence in the country's economy.

Thousands of supporters of PAME, a Communist-backed union, marched through Athens saying they should not pay the consequences of a capitalist crisis.

PAME had called on workers across the country to enforce a 24-hour strike.

Meanwhile, a second credit agency questioned whether Greece's austerity measures went far enough.

The agency Standard and Poor's (S&P) followed Fitch in downgrading the country's credit rating - meaning it thinks Greece is now a riskier place to invest.

ANALYSIS
Malcolm Brabant
By Malcolm Brabant
BBC News, Athens
Earlier this week Mr Papandreou told me that everyone had to shoulder some of the pain of restoring confidence in the Greek economy.

He believes he has the ability to turn Greece around.

But he is caught between the jaws of ruthless investors abroad, and the political ambitions of minority parties at home, which, having been defeated at the polls two months ago, now see an opportunity to flex their muscles.

S&P warned that the government's measures were unlikely to lead to a sustainable reduction in the public debt burden, and said Greece's credit worthiness might slide still further.

The measures announced by Prime Minister George Papandreou this week included a 10% cut in social security spending, cuts in defence spending and pay and hiring freezes for public sector workers, as well as the closure of a third of Greece's overseas tourism offices.

But Greek financial markets have not fared well since the announcement. Shares in banks - which have dropped nearly 18% in the past month - fell by a further 3% on Thursday, while new figures showed the country's rate of unemployment had leapt to a four-year high of 9.3%.

Unity at risk

Dozens of demonstrations were scheduled in Athens and towns across the country on Thursday.

But while the challenge to the two-month-old Socialist government had the backing of journalist's unions, the strikes were not expected to disrupt transportation links as the main Socialist-led transport unions did not back the protests.

George Papandreou, 14 December 2009
Mr Papandreou has outlined a plan to tackle 'systemic corruption'

Greece has come under increasing pressure from the European Central Bank to take action over its deficit. The country's public debt stands at 300bn euros ($442bn; £269bn).

Mr Papandreou says his plan will help reduce Greece's public deficit from the current 12% to less than 3% by 2013.

Announcing his measures to target "systemic corruption" and "red tape", Mr Papandreou said all members of society would have to pull their weight if Greece was to avoid "sinking under all its debts".

Although Mr Papandreou has a big enough parliamentary majority to force through such cuts, he has held talks with opposition leaders in an attempt to forge a cross-party political consensus.

But such groups as the Communists have already made it clear they do not think the financial crisis is a matter that requires national unity, correspondents say.



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SEE ALSO
Greece PM in anti-corruption plan
15 Dec 09 |  Europe
Greeks fear times will get tougher
10 Dec 09 |  Europe
Greece unveils big spending cuts
14 Dec 09 |  Business
Greece says no chance of default
11 Dec 09 |  Business
Greece acknowledges debt concerns
30 Nov 09 |  Business
Greece's debt reaches 300bn euros
10 Dec 09 |  Business

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