The government was forced to pick its way between social unrest and national bankruptcy. Successive waves of austerity measures vastly reduced the wages and seasonal bonuses of civil servants and pensioners, and raised the retirement age and consumer taxes. There was a ban on hiring for the civil service, with thousands of temporary appointments made by the previous government before the election, to buy the loyalty, or to reward the loyalty, of its supporters were laid off. The government also promised to liberalise the transport and energy markets and to simplify the bureaucratic procedures necessary for setting up a business.
There was a general feeling that companies should also be made to pay, since many evaded taxes and social security payments. It was felt that the people who put Greece in deficit should be punished. The trouble was that so many groups were involved, from the corrupt politicians and their contractor friends; the corrupt tax officials and other civil servants, surgeons, etc. who demanded bribes; the professionals (doctors, lawyers, etc.) and artisans (plumbers, electricians, etc.) who avoided taxes by failing to give receipts, and groups such as taxi drivers who enjoyed irrationally advantageous tax terms.
A general strike was called for 5th May. Two women and a man were killed in the Marfin Bank on Stadiou after rioters deliberately set their building alight. These innocent deaths of employees in a vulnerable branch refused permission to leave during the demonstration, shocked the nation.
In 2011 the crisis returned, since Greece had proved unable to reduce its debt and needed more support. As required by the IMF and ECB, the government had sought to raise money to reduce the debt, but had done so by raising taxes on wage earners and pensioners and lowering public sector wages. This dramatically depressed the economy and lowered the government's income from taxes, making the situation worse. The very wealthy moved their fortunes into foreign banks, and the government entirely failed either to tax those who had systematically evaded tax, or to tackle corruption. Nor had they begun the process of making necessary structural changes, since these run against the interests of the powerful and privileged public sector unions on whose support PASOK's support was built. Meanwhile the main opposition party, true to form, merely sought to gain electoral advantage out of the mess it had played such a large part in creating.
The government's response to increased pressure was more of the same: by raising taxes on wage earners and pensioners and lowering public sector wages. Promises of systemic reform, such as cutting through the bureaucracy which stifled small businesses, and tackling corruption, remained promises. Although details of large-scale corruption by leading politicians and big businessmen were common knowledge, none had gone to prison, or even to court. While the bloated, inefficient and corrupt public sector required immediate action, this repeated attempt to make wage earners and pensioners pay for the corruption of the political and big business classes provoked a reaction in the form of huge, leaderless, peaceful demonstrations of the "Indignant" chanting "Thieves" outside Parliament, on the Spanish model, and popular fury against individual politicians appearing in public places.
