Talks to resolve a crippling three-week tractor blockade of highways and border crossings in Greece by farmers collapsed on Sunday, increasing the pressure on a government grappling with the country’s worst financial crisis in decades.
The farmers refused to back down in the row, which is seen as a crucial test of Athens’ determination to impose austerity measures that will redress Europe’s most indebted economy.
On Sunday night, Greek Agriculture Minister Katerina Batzeli signaled that while she remained “open to dialogue,” the government was in no position to meet their demands for about 1 billion euros (US$1.4 billion) in extra subsidies and tax breaks.
“The government is determined to get the country out of the crisis,” she said. “It can’t afford the money they are asking for.”
The blockade, which is believed to cost 25 million euros a day, has disrupted transport, damaged commerce and strained ties with neighboring Bulgaria, where exports have also been hard hit.
The confrontation has put the socialists on a war footing with the subsidy-dependent sector. The EU and markets are piling pressure on Greek Prime Minister George Papandreou to rein in the country’s 300-billion-euro debt, which has spawned fears of imminent bankruptcy for the country. But the government has little room for maneuver.
“Should the government make the slightest concession to them, [it] will then lack the legitimacy to demand sacrifices of other social groups,” political analyst Stavros Lygeros said.
Athens has pledged to roll back its budget deficit from 12.7 percent to 2.8 percent by 2012 through reforms, including spending cuts and increasing tax revenue.
However, Papandreou, elected last October on a pledge that the less privileged would not have to pay the price of fixing Greece’s economy, has been widely criticized for delaying the implementation of painful fiscal policies.
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