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ATHENS, Greece – Greece's government on Tuesday tackled the thorny issue of pension and wage reform, part of its plan to fight a debt crisis that has alarmed global markets, even as strikes were being planned nationwide.
The cabinet talks come as Prime Minister George Papandreou's center left government accelerates austerity measures meant to calm markets and European Union partners, who have urged Athens to swiftly deal with the crisis.
Greece's budget deficit is more than four times the limit allowed by the EU, while the public debt has exceeded 113 percent of annual economic output. This has forced the country to borrow at high rates from international markets, which fear the crisis could spread to other troubled EU economies.
The government has announced euro2 billion ($2.74 billion) in public spending cuts so far, and hopes to raise more than euro5 billion from extra taxes and fighting endemic tax evasion.
But Papandreou's Socialists, elected four months ago, have shied at further salary cuts or layoffs in the civil service, which employs some 750,000 people — all guaranteed lifetime jobs.
Still, the reforms announced so far have angered powerful labor unions, and civil servants have called a nationwide strike Wednesday to protest a wage freeze and bonus cuts.
The walkout will affect state schools, hospitals, tax offices and local government offices, while all Greek airports will be closed to international and domestic flights. Private sector workers will walk off the job on Feb. 24
Papandreou on Monday called on the unions to show restraint.
