Workers threaten strikes against Greek fiscal plan

ATHENS, Jan 7 (Reuters) - Greek labour unions are threatening to strike next month against a plan prescribed by the European Union to cut pay and hike taxes, piling pressure on the socialist government.

Public sector union ADEDY and its private sector sister GSEE said on Thursday they would stage a nationwide strike in early February to protest a plan that will mean a 3-4 percent salary reduction for public servants and tax hikes for most Greeks.

"If the plan proves to be an adoption of the monetarist, neo-liberal views of the Brussels bureaucrats, we will react, starting with a strike in the first 10 days of February," said GSEE spokesman Stathis Anestis.

The socialist government that came to power in October promising to tax the rich and help the poor, has no choice but to opt for austerity after revealing that the defeated conservatives under-reported deficits, prompting turbulence on Greek markets and EU calls for urgent measures.

The socialists promised to cut the budget deficit to below the EU's limit of 3 percent of gross domestic product by 2012 from 12.7 in 2009. Forced to borrow to plug budget holes, Greece is set to become the euro zone's most indebted member this year.

An EU inspection team was in Athens from Jan. 6 to 8 to look at a tough deficit cutting programme that will be submitted to Brussels at the end of January. Government officials said on Thursday the team had asked for more details.

TOUGH MEASURES

The government has so far announced a series of measures, including a 10 percent cut in supplemental public sector wages -- extra monthly pay that is not part of basic salary -- as well as a public sector hiring freeze and a 10 percent reduction in social security expenditure this year. [ID:nLDE604106]

"I can't imagine that there will be cuts in health and education spending," Anestis said.

The EU and economic analysts want Greece to impose tougher, long-term public spending cuts rather than one-off taxes.

"Many critical points remain unclear but we estimate that from the cut of supplemental salary allowances we will have a reduction of 3-4 percent in public sector wages," said Spyros Papaspyros, president of ADEDY.

"With some of the tax law changes, some categories may suffer a reduction of over 10 percent," he told Reuters.

Greeks, fed up with chronic corruption in the EU's weakest member, appeared ready to take to the streets if the EU's bitter medicine was not distributed fairly.

"We shouldn't protest against the EU ... We should go to the streets to protest against the governments that made all the mistakes and spent the money buying new villas," said Katerina Sariyanni, who is a public sector pensioner at 52.

Others said measures were necessary and they would accept them, provided the pain was spread evenly. They accused public sector employees like Sariyanni of not carrying a fair load.

"There are people working nightshifts, weekends and overtime and get a total of 1,300 euros and others in ministries get twice as much for doing nothing. These are the people that should be affected," said Yannis Bastoyannis, 54, who works as a night guard in the public sector.

Most Greeks, tired with the failure of consecutive governments to shore up the budget, cut unemployment and put Greece back on a path to economic growth, say they would welcome the EU taking charge to help cure Greece's ills.

"It's good that the EU is putting pressure on us, it's for the best because they are the only ones that can bring order in a lawless country," Sariyanni said.