Spotlight: Farmers' anti-reform protests severely harm Greek economy: gov't warns

The escalating protest action of farmers across Greece, who oppose the planned pension and taxation systems reforms, are severely harming the health of the already ailing national economy, the Left-led government warned on Monday as an invitation to start talks in search of a fair compromise was still pending.

A month after the launch of the blockades across key national highway junctions and border crossings for several hours each day, the impact is significant on the economy, Deputy Foreign Minister Dimitris Mardas told local Mega TV channel.

Although there are still no official estimates on the damages, the minister drew parallels with the 1997 similar mobilizations that lasted 58 days.

"The cost to the economy at the time reached 13 billion drachmas and the value of agricultural exports declined by 100 million euros that year," Mardas noted, underlining that it took Greek exporters about three years to recover, as foreign clients turned to other markets.

For the time being, the Greek Exporters' Association estimates that blockades which are causing long delays in the transport of products and force companies to seek alternative roads may be costing up to 30 million euros (34 million U.S. dollars) a day.

About 43 percent of Greece's exports are delivered by road, according to 2015 data, the association noted, warning that potential damages may double if farmers will increase pressure on the government by also sealing off ports and railways, as they have threatened.

At the moment exporters explain that the cost of supplies is being pushed up and they may face penalties from their customers due to delays in deliveries.

Shortages in products have not been reported in the Greek market, but representatives of chambers, such as the Athens Chamber of Small and Medium Industries Pavlos Ravanis, stressed that several companies have reported that they are now facing shortages in supplies of necessary materials for their production chain.

Mardas called on protesting agriculture producers once again on Monday to enter a substantial dialogue with the government, while a delegation of farmers was submitting a list with their demands to the prime minister's office and the nationwide coordinating committee of the 68 road blocks was holding a general assembly in the city of Larissa in central Greece to discuss their next steps.

"We will not hold talks at the moment ... We give a 48-hour deadline to the government to answer on our requests and we will then decide on our future stance," Dimitris Dimoyannis, General Secretary of the Coordinating Committee of Farmers, Breeders and Fishermen, told Greek national news agency AMNA.

The key demand of protesters is the withdrawal of the government's proposals for the overhaul of the pension system and taxation, according to Vangelis Boutas, a veteran unionist who had participated in the 1997 mobilization and today is a member of the protesters coordinating committee.

Farmers request among others that the government helps them cope with the high cost of production by reducing the cost of electricity and diesel for agricultural use or abolish the VAT on their supplies.

The gap between the two sides seems still wide, as cabinet ministers dismissed as "unacceptable for the government and the rest of Greek society" farmers' demands for a tax-free threshold of 30,000 euros annual income for instance.

"Such demands are unheard of ... Several farmers at the blockades are actually wealthy businessmen and should contribute to taxes revenues and payments to social insurance funds by paying according to their real capacity," Deputy Interior Minister Yannis Balafas told local SKAI radio station.

The more than 15,000 farmers who have hit the streets this winter are claiming that with the promoted new tax hikes in combination with the increase of contributions to pension funds to ensure their sustainability in several cases they will be losing up to 80 percent of their income.

The government has indicated that it is willing to negotiate some changes to the draft bills that will be put to vote in parliament in coming weeks to soften the effect on the low income farmers. For example, the introduction of the increase of farmers' contributions to funds to 20 percent of their total income up from the current 6 percent could gradually come into effect until 2021, ministers have suggested.

However, the government underlines that inaction and preservation of the current terms is no option and the reforms should be implemented with no further waste of time to exit the seven year debt crisis, achieve the stability of the Greek economy and restore growth.

The pension system's overhaul this winter is a key request of Greece's international lenders in order to release further vital loans to the country. Endit