Austerity talk postpones as Greece goes on strike

In a major development, the union members in Greece has threatened to go on a nation-wide, day-long strike on Tuesday. This includes members of civil servants as well as private-sector workers who are already frustrated by two years of austerity and are against more stringent reforms that will dent a bigger hole in their earnings. The strike has delayed Greek government’s attempt to reach a final decision on revised austerity plan to Wednesday. Incidentally, this is the second time that the government of Greece has failed to meet the deadline.

As Greece prepares for a long haul, its leaders are striving hard to strike a balance between reform demands (by its private eurozone creditors) and the need to retain public support, especially with the elections coming later in 2012. Greece is desperately seeking a second €130 billion rescue fund from its private International creditors to repay a € 14.4 billion bond redemption due in March.

The troika of private creditors to Greece, that includes IMF, ECB and the European Commission, are relentlessly pressing for increase in tax, further cut in spending and wage cuts. The new threat has rattled Greece’s middle class who are already facing the heat from closing down of businesses, high unemployment rate and severe money crunch.