Greek unions set to strike over new austerity demands

Protesters back on the streets of Greece
Protesters back on the streets of Greece

    JUST WATCHED

    Protesters back on the streets of Greece

MUST WATCH

Protesters back on the streets of Greece 03:22

Story highlights

  • Greek officials are under pressure to reach a deal for a new bailout
  • Greece needs the money to ensure it avoids default on a payment due in March
  • Unions say they are unhappy with the new cuts being demanded by Greece's lenders
  • The prime minister needs to secure the backing of the main political parties for the deal

Greek union members are expected to go on a daylong strike Tuesday to protest new austerity measures sought by foreign lenders as the country negotiates to keep its finances afloat.

Officials in Greece are under pressure to reach an agreement on a new bailout package with the threat of a default hanging over the country.

Prime Minister Lucas Papademos met with officials from the European Union, International Monetary Fund and European Central Bank on Monday to try and hammer out the details of a €130 billion bailout deal.

Greece needs the money to avoid defaulting on a €14.5 billion bond redemption in March. The concern is that a so-called disorderly default could force Greece out of the euro monetary union and shock the global financial system.

Papademos must also convince the leaders of Greece's three main political parties to back a package of fiscal and economic reforms that are a condition of the bailout.

The party leaders agreed over the weekend on the "main elements" of the program, including a plan to reduce public spending by 1.5% of gross domestic output this year, according to Papademos.

But talks scheduled for Monday were pushed back to Tuesday amid apparent disagreements over additional job and salary cuts, as well as pension reforms and tougher tax enforcement.

The country's unions say they are unhappy with the new demands. They have called many strikes in the past few years to protest the successive waves of austerity measures announced by the authorities.

Greece under pressure to make debt deal
Greece under pressure to make debt deal

    JUST WATCHED

    Greece under pressure to make debt deal

MUST WATCH

Greece under pressure to make debt deal 01:37
Maastricht Treaty 20 years later
Maastricht Treaty 20 years later

    JUST WATCHED

    Maastricht Treaty 20 years later

MUST WATCH

Maastricht Treaty 20 years later 03:17
Forced retiree barely gets by in Greece
Forced retiree barely gets by in Greece

    JUST WATCHED

    Forced retiree barely gets by in Greece

MUST WATCH

Forced retiree barely gets by in Greece 03:57
Bill Gross: Greece will default
Bill Gross: Greece will default

    JUST WATCHED

    Bill Gross: Greece will default

MUST WATCH

Bill Gross: Greece will default 05:34

Greece, which owes some €330 billion, has come close to default before.

The nation has struggled to follow through on budget cuts and economic reforms that were a condition of its 2010 bailout package. But the nation's economy has been in recession for years and many analysts warn that additional austerity could make the situation worse.

EU leaders have been sounding increasingly frustrated with the lack of progress in Greece.

President Nicolas Sarkozy of France said Monday that failure was not an option for Greece, adding that "considerable measures" had been put in motion to help the nation "out of the situation it finds itself in today."

"But the Greek leaders have made commitments and they must respect these scrupulously," he said. "There is no choice, there is no choice."

EU finance ministers are widely expected to hold an "extraordinary" meeting sometime this week, although no official date has been set.

Meanwhile, Greece appears close to a deal with its creditors in the private sector to write down a portion of the nation's debt.

The agreement, which would result in significant losses for bondholders, is intended to help reduce Greece's debts to 120% of GDP by 2020, from about 160% currently.

The worsening Greek economy has raised calls for the nation's creditors in the "official sector" to provide some relief.

The European Central Bank, which holds an estimated €30 billion to €45 billion of Greek debt, is under pressure to forego profits on those bonds, as are individual euro area central banks.

      Markets in crisis

    • German Chancellor Angela Merkel talks with Finance Minister Wolfgang Schaeuble during a session at the Bundestag (lower house of parliament) on June 25, 2013 in Berlin.

      Schaeuble: 'Don't see' bailouts

      German Finance Minister Wolfgang Schaeuble says the eurozone's problems are not solved, but "we are in a much better shape than we used to be some years ago."
    • IBIZA, SPAIN - AUGUST 21:  A man dives into the sea in Cala Salada beach on August 21, 2013 in Ibiza, Spain. The small island of Ibiza lies within the Balearics islands, off the coast of Spain. For many years Ibiza has had a reputation as a party destination. Each year thousands of young people gather to enjoy not only the hot weather and the beaches but also the array of clubs with international DJ's playing to vast audiences. Ibiza has also gained a reputation for drugs and concerns are now growing that the taking and trafficking of drugs is spiralling out of control.  (Photo by David Ramos/Getty Images)

      Spain keeps partying

      Summer could not have come soon enough for Lloret de Mar, a tourist resort north of Barcelona. Despite the country's troubles, it's partying.
    • The Euro logo is seen in front of the European Central bank ECB prior to the press conference following the meeting of the Governing Council in Frankfurt/Main, Germany, on April 4, 2013.

      OECD: Slow recovery for Europe

      The global recovery has two speeds: That of the stimulus-fed U.S. and that of the austerity-starved eurozone, according to a new report.
    • The flags of the countries which make up the European Union, outside the European Parliament in Strasbourg, France.

      Europe's new threat: Slow decay

      The "rich man's club" of Europe faces economic decay as it struggles to absorb Europe's "poor people", according to economic experts.
    • Packed beaches and Brit pubs? Not necessarily. Here's what drew travelers to one of Spain's most beautiful regions in the first place

      Spain aims for big tourist summer

      Spain's economic crisis is in its sixth straight year yet tourism, worth 11% of GDP, is holding its own, one of the few bright spots on a bleak horizon.
    • Photographer TTeixeira captured these images from a May Day protest in Porto, Portugal, Wednesday by demonstrators angered by economic austerity measures. "People protested with great order, but showed discontent against the government who they blame for this economic crisis," she said. "They want the government to resign and the Troika [European Commission, International Monetary Fund and European Central Bank] out of this country."

      May Day protesters flood Europe

      As European financial markets close for the spring celebration of May Day, protesters across Europe and beyond have taken to the streets to demonstrate.
    • Croatian Prime Minister Zoran Milanovic delivers a speech in Mostar, on April 9, 2013. Prime Ministers from Bosnia's neighboring countries arrived in Bosnia with their delegations to attend the opening ceremony of "Mostar 2013 Trade Fair".

      Croatia PM: We need Italy to recover

      As Croatia prepares to enter the 27-nation European Union, the country's Prime Minister says Italy must return to being the "powerhouse of Europe."
    • Anti-eviction activists and members of the Platform for Mortgage Victims (PAH) take part in a protest against the government's eviction laws in front of the Popular Party (PP) headquarters in Mallorca on April 23, 2013.

      Spain's unemployment hits record

      Spain's unemployment rate rose to a record high of 27.2% in the first quarter of 2013, the Spanish National Institute of Statistics said Thursday.
    • People protest against the Spanish laws on house evictions outside the Spanish parliament on February 12, 2013 in Madrid, Spain.

      Welcome to Madrid: City of protests

      Spain has seen hundreds of protests since the "Indignados" movement erupted in 2011, marches and sit-ins are now common sights in the capital.