Greek Tax Officials Strike in Protest of Austerity Cuts

In protest of salary cuts and other austerity measures, Greek tax officials walked off the job Thursday at the start of a 48-hour strike to take place on the last two working days of the year.

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With tax offices shutting down on Thursday, Greeks rushed Wednesday to settle last-minute issues before the strike. Many handed over their car license plates, preferring to keep their vehicles off the road rather than pay an increased tax.

In return for a 110 billion-euro bailout, Greece’s previous Socialist government imposed harsh austerity measures, increasing taxes and retirement ages, cutting pensions and salaries, and suspending tens of thousands of civil servants on reduced pay.

“As a result of the austerity measures putting some tax officers on reduced pay, we have 5,500 fewer tax office jobs,” said tax officers’ union head Charalambos Nikolakopoulos.

Despite repeated efforts to crack down on tax evasion, it continues to be a major problem in Greece. The strike comes a day after two prosecutors heading the judicial task force charged with fighting tax evasion suddenly and unexpectedly resigned. Grigoris Peponis and Spiros Mouzakitis claimed they were being sidelined and implied government interference in their work.

The two claimed the government was “attempting to replace and get rid of” them with a new draft law that would appoint a high court prosecutor in their stead. The finance and justice ministries have said the draft plan was meant to improve the task force’s functionality.

Today, Prime Minister Lucas Papademos is meeting with top judicial officials after the main Supreme Court prosecutor ordered an investigation into why the two resigned and their allegations of interference.

The repeated rounds of austerity measures Greece instituted to receive its first bailout has left the country struggling through a deep recession, with the economy projected to contract for a fourth consecutive year in 2012. It quickly became clear that the initial bailout would not be enough to prevent a potentially catastrophic default, and European leaders in October agreed on a second, 130 billion-euro bailout for the country.

The new packaged has private creditors accepting a 50 percent write-down on the value of the value of their Greek debt holdings, potentially cutting Greece’s overall debt by 100 billion euros. However, the details of the package are still being worked out, and the country is currently involved in tough negotiations.

If the debt write-down goes through and Greece implements all of austerity measures and privatizations it has pledged, the country is expected to reduce its debt to 120 percent of gross domestic product by 2020, down from 161 percent of GDP this year.

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To contact the reporter on this story: Emily Knapp at staff.writers@wallstcheatsheet.com

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