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FINANCE > Lenders demand Greece to apply further wage cuts

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Greece should find 1.5 billion euros in savings to satisfy its lenders, a source says. German finance minister sees no room for further concessions to Greece

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Greek Prime Minister Antonis Samaras. AFP photo

Greek Prime Minister Antonis Samaras. AFP photo

Political leaders in Greece have agreed on most of the austerity measures demanded by its creditors and are now eyeing wage cuts to find the final 1.5 billion euros of savings still needed, a source close to the talks said yesterday, Reuters reported.

Greece must find savings worth 11.5 billion euros for 2013 and 2014 to satisfy its increasingly impatient lenders who are currently on a visit to Athens to evaluate the country’s progress in complying with the terms of its latest bailout.

Prime Minister Antonis Samaras’s government last week managed to draw up a list of measures to achieve those savings, but the three parties in his conservative-led administration failed to agree on them, and are to due to resume talks today.

Lenders not convinced

“The political leaders don’t disagree on anything, there are just alternative proposals being discussed to protect those with low pensions or incomes in the public sector,” said the source, who is involved in the talks, according to Reuters. “We need measures worth 1.5 billion euros to finalise the 11.5 billion euro package.”

But the lenders have so far appeared far from convinced, and officials have told Reuters the country is likely to require a new debt restructuring that the eurozone - faced with market turmoil in Italy and Spain as well - can ill afford.

Greek media have reported that the country’s leaders are discussing possible layoffs of contractors in the public sector, a cap on pensions, cuts in welfare benefits, reductions in tax exemptions, and lower salaries for public employees as well as raising the retirement age by a year to make up for the shortfall in savings.

With a decision on a new tranche of aid to Greece not expected until September, the country’s already dire financial position appears to be getting increasingly precarious.

“The fact that we have not received the agreed aid installments has put pressure on our cash reserves. Until then, we are taking extra care in managing our cash,” Deputy Finance Minister Christos Staikouras told Real News weekly. The so-called troika of EU, European Central Bank and IMF lenders is due to wrap up its visit to Athens in the coming days and return in September to complete its assessment of whether Greece deserves more aid.

Meanwhile, Germany’s finance minister said in an interview published yesterday that he cannot see room for further concessions to Greece, insisting anew that the country must implement far-reaching reforms and cut its budget deficit. International debt inspectors are scrutinizing Greece’s finances and its progress in implementing unpopular budget cuts and reforms demanded in exchange for the rescue loan program that is keeping the country afloat.

Greek officials have called for more time to implement the measures, but patience among creditors is running extremely short. “The aid program is already very accommodating. I cannot see that there is still scope for further concessions,” German Finance Minister Wolfgang Schaeuble was quoted as telling the Welt am Sonntag newspaper.

July/30/2012

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kerem atan

7/31/2012 2:17:29 PM

the only thing greeks are proud of is their gross capita whilst more wage cuts and low pensions are awaiting them. greek unemployment hits a record. the jobless rate of young greeks is over 50%.theres a depression in greek people.they are opting to work abroad. regardless of this negative image ,greeks console themselves by comparing greece with turkey .but the fact is no country wants to be in the situation of greece currently.

Aristomenis

7/30/2012 6:16:37 PM

@ Red Tail: Hello, you can get advised by wikipedia-English Version, for the greek gross capita per year regarding year 2010. Then you can multiple with 0.65-0.70 to see the current situation. Now, for the professions that you ask have many salary differences. Let's say a judge (entry level) may earned two years ago 2.500 Euro per month (net). A techer (entry level again) 1.000 Euros net e.t.c. In any case the standard salary up to 2011 for a simple new employ was 750-net. Greetings

dogan kemal ileri

7/30/2012 3:09:59 PM

It would be far more rewarding to assign a team of top international private detectives to trace where the hundreds of billions of Euros grabbed out of EU funds at near zero interest rates by the money hungry Greeks by stealth and deception and who their accomplices were within EU structures who turned a blind eye and allowed this deception of gargantuam proportions to occur.The Greeks have put the entire EU experiment on a life support machine.Well done you lovely Greeks,audios EU!!!

Aristomenis

7/30/2012 2:43:49 PM

@john albay: Official unemployed is 25% *two years ago it was 10-12%. Don't be so stereotypic-every body pays his bills.

Aristomenis

7/30/2012 2:29:24 PM

@ Red Tail: Hello, you can get advised by wikipedia-English Version, for the greek gross capita per year regarding year 2010. Then you can multiple with 0.65-0.70 to see the current situation. Now, for the professions that you ask have many salary differences. Let's say a judge (entry level) may earned two years ago 2.500 Euro per month (net). A techer (entry level again) 1.000 Euros net e.t.c. In any case the standard salary up to 2011 for a simple new employ was 750-net. Greetings

john albay

7/30/2012 12:29:24 PM

@red tail, I think in greece they are all uemployed at present! Also many of the groups of people you write about work "black" in order not to pay tax and to increase they salary as it is so low.

Red Tail

7/30/2012 10:30:13 AM

Does anyone know the salary of a regular state employee in Greece? For example a teacher, a judge, a doctor or a professor? And what is the salary in Turkey for the same job? I have no clue but it wouild be interesting to know.

john albay

7/30/2012 9:28:27 AM

The greek goverment will again lie and swindle and try not to keep its word to the lenders , and of course the end game for the greeks is to never pay back the money it has borrowed. It would be far better for everyone if the greeks and their puppets in greek occupied cyprus were kicked out of the Eurozone and the EU.
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