Troika’s Next Target: Cut Private Sector Salaries

ATHENS – Even as Greece’s public workers continue to struggle under waves of pay cuts, tax hikes, slashed pensions and scores of thousands of layoffs the government said is necessary to satisfy international lenders and keep the country from going bankrupt, workers in private businesses could soon find themselves in the same boat. Representatives of the Troika of the European Union-International Monetary Fund-European Central Bank are in the capital this week to discuss more austerity measures, a possible write down of 50 percent of much Greece’s debt, but also are pressing for labor cost cuts at private businesses.
The newspaper Kathimerini reported that the Troika wants Greece to reduce holiday bonus payments and eliminate pay raises agreed upon under binding negotiations last year, effectively scrapping the legal rights of private workers, and letting their bosses decide pay rates. It’s already begun at some businesses. One woman, an English teacher at a private school, said the owner called her and said her pay was being cut immediately from $1585 a month to $1,057, a 33 percent reduction, while workers at other businesses said they were living in dread fear of being next.
Greece is surviving on a series of $152 billion in rescue loans from the Troika, counting on a second bailout of $175 billion, and narrowly escaped bankruptcy this month when a desperately-needed and long-delayed $11 billion installment was released, without which there would have been no money to pay workers and pensioners. But the Troika said cutting public sector expenses isn’t enough and that Greece must reduce the pay of private workers to become more competitive in the EU, and because the austerity measures haven’t done enough to reduce a deficit hovering near 10 percent and a staggering $460 billion debt.
Finance Minister Evangelos Venizelos, who has imposed waves of tax hikes, including on the poor, while failing to effectively rein in major tax evaders costing the country $60 billion, met with the Troika officials and said this week would be “crucial for the country,” similar to what he has said previously as the crisis worsened. He said the past few months had been a “constant, anxious struggle to keep the country on its feet,” and said the 2012 passed through Parliament by a a coalition government headed by interim Prime Minister Lucas Papademos may be enough to ward off more austerity measures, although it includes more of the same.
The lowest salary for private workers is now about $989 before taxes, which have risen considerably, helping create a deep recession of 17.5 percent unemployment, leaving 500,000 people without any income at all, and pushing more than 500,000 others to leave the country since the crisis began more than 18 months ago. Some 100,000 businesses have also closed as many Greeks have slowed or stopped spending.
Health Minister Anna Diamatopoulou, a holder from the former ruling PASOK Socialist party that makes up a caretaker government with bitter rival conservatives from New Democracy and the far Right-Wing LAOS party has joined a growing chorus of those who believe the coalition will need more time to do its work and that snap election set for Feb. 19 should be postponed. Greece’s politicians are now divided about the timing of the vote, some saying Papademos should get a longer mandate.
In an interview with Kathimerini on Sunday, Former President Costis Stephanopoulos appealed to Greece’s political parties to “stop seeking elections” and to “give (Papademos) enough time” to create political and economic stability. A recent Public Issue poll found that Greek voters are equally divided over the prospect of early national elections, with one in two being against the idea of holding snap polls. New Democracy leader Antonis Samaras agreed to join the coalition but only if elections were held quickly, but hasn’t yet responded to the notion of delaying them.
Unresolved in the political wrangling is what will happen with private sector workers who have joined municipal employees in a number of strikes, including one earlier this month that shut down public services and interrupted a number of private businesses. The private sector union GSEE is bracing for cuts. “There must be no illusions, austerity will continue in 2012 and so will our mobilization because insecurity and the threat of unemployment persist,” GSEE chairman Yiannis Panagopoulos told Agence-France-Presse earlier. GSEE and the public sector union ADEDY, officially with a million members, have held over a dozen general strikes in the last two years as Greece. “Greece is the guinea pig and Europe’s legal and political culture is being put to the test,” ADEDY Chairman Costas Tsikrikas said. Civil servants, who have enjoyed lifetime tenure with few controls, have had their pay cut up to 40-50 percent since May last year, Tsikrikas said.
The ranks of the unemployed – already at more than 800,000 — will swell further under a plan to oust 150,000 civil servants by 2013, he said after the announcement that 20,000 are going to be put into a reserve pool at 60 percent pay and then likely fired in a year, with scores of thousands of more next. “This is a cursed day for the public service and state employees … We are determined to fight to overcome these barbaric policies,” the union said, a mantra that could soon be repeated at private companies who’ve workers have largely escaped the same fate so far.