Greek tax inspectors to strike, protests spread

ATHENS Wed Oct 12, 2011 3:43pm BST

A protester stands in front of a police formation during a protest against planned wage cuts outside the parliament in Athens October 11, 2011. REUTERS/Yiorgos Karahalis

A protester stands in front of a police formation during a protest against planned wage cuts outside the parliament in Athens October 11, 2011.

Credit: Reuters/Yiorgos Karahalis

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ATHENS (Reuters) - Greek tax inspectors will go on strike next week to protest against planned wage and pension cuts, threatening more disruption to revenue collection efforts that are already falling behind budget targets imposed by international lenders.

With much of Greece expected to be shut down by a general strike on October 19, finance ministry officials have called a two-week stoppage from October 17 while tax offices will remain closed from October 17-20 and customs officials will stay away from their desks from October 18-23.

On Wednesday, the finance ministry in Athens was shuttered with a black banner reading "Occupied" hanging down the front of the building, which faces parliament across the central Syntagma Square.

"Everything is falling apart, we are suffering along with everyone else in the public sector," said Nikos Klouvatos, head of the union representing workers at the statistics agency. "We would not have reached this point if the government had taken the right measures in time."

Greece is trapped in deep recession and fighting to control a public debt mountain expected to reach 162 percent of GDP this year, and there has been growing doubt over whether the austerity measures will be enough to prevent default.

Data on Wednesday showed the central government budget deficit widened by 15 percent in the first nine months of the year as the shrinking economy produced less tax revenue despite a rise in sales tax in restaurants and a one-off income tax surcharge.

On Tuesday, officials from the EU-IMF-ECB "troika" said that Athens would miss its 2011 fiscal targets and needed to take additional steps to get back on track to meet objectives beyond 2012.

But the measures imposed so far have strained Greek society severely and raised questions over how much more pain workers would accept.

"We'll continue with labour action and occupations next week when the general strike takes place," said Despina Spanou, a senior leader of the ADEDY union, which represents half a million public sector workers.

"We expect it to be the biggest walkout so far," she told Reuters, adding that her salary had been cut by 70 percent since 2009. "We cannot live like this," she said.

EU SUMMIT

Parliament is debating a sweeping package of measures, ranging from wage and pension cuts to tax rises and large-scale public sector layoffs, which Finance Minister Evangelos Venizelos said must be approved before an October 23 EU summit.

"This law needs to be approved before the EU summit so that the prime minister can stand up and argue that Greece is fulfilling its obligations," Venizelos told lawmakers at a reading of the legislation in parliament on Wednesday.

Analysts expect the law to pass despite discontent among ruling Socialist party lawmakers.

Prime Minister George Papandreou discussed the euro zone debt crisis late on Tuesday with IMF chief Christine Lagarde, but his office gave no details of their talks.

The government has already admitted it will miss initial 2011 deficit targets and Venizelos has warned that if citizens fail to back new tax measures, the 2011 deficit could reach 9 percent of GDP, above the new 8.5 percent goal.

The conservative opposition, which opposes the austerity measures and is leading the Socialists in opinion polls, said the government had failed.

"The 'rescue plans' are collapsing, one after another -- the budget execution figures confirm this," the party's economy spokesman Christos Staikouras said. "This is a bottomless pit, the fiscal holes get wider and wider."

Outside parliament, a couple of thousand demonstrators took part in what have become daily protests against the measures.

Garbage piled up in some areas as municipal workers stopped work, and a 48-hour strike starting on Thursday will halt public transport in Athens, adding to the misery of Greeks facing the deepest cuts in postwar history.

The walkouts by tax and customs officials are expected not only to disrupt badly needed tax payments, but also to disrupt fuel supplies, as petrol deliveries from refiners to filling stations usually require customs clearance.

Crowds of foreign tourists were barred from entering the Acropolis in Athens because of a strike by archaeological service workers, responsible for running sites which bring in much-needed tourist revenue.

Athens has promised tough new civil service wage cuts to convince the European Union and the International Monetary Fund that it will meet new budget deficit targets of 8.5 percent of GDP this year and 6.8 percent in 2012.

The planned strike, by workers who will suffer from the austerity measures, underlines the difficulty of pushing through the tax collection drive demanded by the EU and IMF inspectors.

Disgruntled power workers have threatened to boycott a planned property tax, designed to be collected through utility bills as a means of bypassing the notoriously inefficient tax authority.

Many public servants have lost a fifth of their salaries since the start of the crisis and now face further cuts of up to 20 percent. Some 30,000 are also being assigned to a so-called labour reserve, a step towards redundancy.

(Additional reporting by Lefteris Papadimas; writing by James Mackenzie; editing by Tim Pearce)

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