Greek Unions Warn of Austerity “Death Spiral”

From Reuters:

Greece risks sliding into a "death spiral" if the government continues to slash salaries and lay off workers instead of cracking down on tax evasion and raising money from the rich, the head of the biggest public sector union said Tuesday.

Speaking ahead of a 48-hour general strike called to protest tough new austerity measures, due to be approved this week, Costas Tsikrikas, head of the 500,000-strong ADEDY union, accused Prime Minister George Papandreou's Socialist government of blindly pursuing austerity measures that would plunge Greece deeper into recession.

"This will exacerbate recession, unemployment and state revenues will continue to fall, creating a death spiral. It must not continue," Tsikrikas told Reuters in an interview and urged lawmakers to reject the package when it is voted in parliament Wednesday and Thursday.

Tsikrikas said the latest measures, which include tax hikes and pay and pensions cuts, would wipe out any hope of growth for the stricken Greek economy, crushed by debt and now in its third year of recession.

"All we're doing every time is waiting for the troika to release the next tranche," he said, referring to inspectors from the European Union, the European Central Bank and the International Monetary Fund which visit Athens every three months to assess whether Greece deserves new bailout loans.

"The government has to call on the rich to contribute. Workers look more like squeezed lemons now, they can't take it anymore," he said.

"The state must take the money from those who have the income to pay the taxes. The rich, the big companies that use the workforce of this country," Tsikrikas said. "Don't they owe the country and its people something?"

http://www.reuters.com/article/2011/10/18/us-greece-unions-idUSTRE79H39120111018