Up to 50% of Greek Workforce Strikes; Tipping Point Nears

People walk by closed shops in Athens on Oct. 18, 2012, during the 24-hour general strike.
People walk by closed shops in Athens on Oct. 18, 2012, during the 24-hour general strike.

As European Union leaders prepare to meet in Brussels on Thursday, Greece's workers aim to make their voices heard by holding a 24-hour strike bringing the country to a halt. With the economy in the fifth year of a recession, the lost production could prove counterproductive and cost the economy 100 million euros ($131 million), according to one expert.

Most business and public sector activity is expected to grind to a halt during the strike called by the ADEDY and GSEE unions that represent around 2 million people — half of Greece's workforce . A protracted news blackout is also expected as television and radio broadcasters and newspapers shut for the day, according to Reuters.

Professor Peter Doukas, Greece's former deputy minister of economy and finance, told CNBC that the strikes were mainly limited to public sector workers — and not all of them would walk out of work.

"If our (gross domestic product ) is roughly 200 billion euros ($262 billion), then a day of productivity lost is worth 1 billion euros. If one in three workers goes on strike, then the loss would around 300 million euros — but I think not all of them will strike, " Doukas told CNBC on Thursday.

"The loss will not be 1 billion and it will not be 1 million — I think it will be no more than 100 million euros, " he said, adding however that still, the economy could do without it. "However, the strikes are costing the economy more than it can bear right now."

On Thursday, public hospitals in Greece called in emergency staff, and law courts and government ministries were set to close; the national and international transport network was also expected to be severely disrupted.

Public transport workers in Athens, air traffic control employees, and shipping lines have also planned intermittent strikes over the 24-hour period.

Giada Gianni, European economist at Citigroup, told CNBC that it was difficult to quantify the exact impact of the strike on GDP, but that a drop in service sector output would undoubtedly have a negative effect on the economy.

"[Strikes are not good, ] especially in terms of their impact on the service sector and output in that sector, which is calculated on hours worked, " Gianni said, calculating that a 24-hour strike would mean one day of productivity is taken out of a 20-day average working month.

"Though there have been other strikes in Greece this year, but say we take today as an example and everyone in Greece stops working for the day, that would equate to a 5 percent drop in output for the month — that's a drop of 2 percent in output every quarter, " Gianni added. "Obviously, it's not good, "

Professor Doukas, currently chairman at Capital Partner, told CNBC that the protests were "less than commensurate" with the pension and wage cuts (of 25 percent and 30 percent, respectively) that ordinary Greeks were experiencing.

"Given the hardship Greeks are experiencing at the moment, strikes are to be expected, though they are not as bad as they could be, " he said. "There is mostly no looting, like we have seen in other places in Europe, these are mostly peaceful protests, especially under the circumstances of pension and wage cuts, shops closing, and unemployment ."

European officials are expected to discuss a European banking union at the two-day EU summit in Brussels rather than the financial aid needs of Greece, Spain, or Cyprus.

Greece's workers are increasingly angry at their government's moves to find further cuts in order to meet demands from the troika of lenders (the International Monetary Fund , the European Union, and the European Central Bank ).

Greek Prime Minister Antonis Samaras has said that the country must impose cuts in order to secure the next installment of its 130 billion euro bailout that will keep it afloat.

The country is trying to find a further 11.5 billion euros of cuts by reducing welfare and health spending.

"Just once, the government ought to reject the troika's absurd demands, " Yannis Panagopoulos, head of the striking GSEE private sector union, told Reuters.

—By CNBC's Holly Ellyatt