School teachers, state hospital doctors, dock workers and journalists have walked off the job in Greece to protest against the government's attempts to shore up public spending as its debt crisis worsens.
On Wednesday, international ratings agency Standard and Poor's downgraded Greece's long-term credit rating, mirroring a move by Fitch last week. In a statement Standard and Poor's said that austerity measures announced this week by Greek Prime Minister George Papandreou "are unlikely, on their own, to lead to a sustainable reduction in the public debt burden."
Greek debt is expected to reach 120 percent of its gross domestic product next year, double the European Union target of 60 percent.
Papandreou, whose Socialists were elected just two months ago on campaign promises of saving the economy and reducing the country's debt, has said his government will protect poorer citizen. But Communist-led unions are skeptical.
"The new government measures aim to completely overturn our rights," the Athens journalists' union said in a statement.
Papandreou and his government have proposed cuts in military spending and public sector hiring and pay, a 10 percent cut in civil servant benefits, tax hikes, a crackdown on tax evasion and a total overhaul of the fiscal system. Taking a cue from Britain and France, he's also suggested an aggressive tax on bank bonuses of 90 percent.
Not good enough for some
But these efforts have earned him little praise from his European colleagues.
"Greece is giving us great concern," said Germany's finance minister Wolfgang Schaeuble after meeting with his Greek counterpart in Berlin on Wednesday. There's no other option than "for Greece to go down the hard, much more difficult path" to healthy finances, he said.
And EU Commissioner for Economic and Monetary Affairs, Joaquin Almunia, says the EU is waiting for "concrete measures that will strengthen fiscal adjustment in 2010 and ensure a fast consolidation of public finances."
Papandreou insists that he is ready to do whatever it takes to rein in Greece's public debt and convince the international community of the long-term stability of Greece's economy. "Credibility takes time to build and the window of opportunity is very small," he said.
Time may be running out for Greece. The third largest ratings agency, Moody's, has warned that it is reevaluating its ratings of Greek debt and that a downgrade could be imminent.
Editor: Trinity Hartman