Greek ministers agreed deep cuts to the minimum wage on Tuesday, slashing living standards for low-paid workers as Athens began implementing measures demanded by international lenders in return for a 130 billion euro rescue package.
Cabinet approved the cuts, which will hit workers already struggling after more than four years of deep recession, as it signed off on a series of steps agreed in principle by parliament last week, a government official said.
The move, which will pass into law without the need for further parliamentary approval, imposes a 22-percent cut on the standard minimum monthly wage of 751 euros. For those under 25, the cut will be even more brutal, a 32-percent reduction.
In addition, it will impose a public-sector wage freeze until the unemployment rate, currently 21 percent, falls below 10 percent.
As the legislative process underpinning Greece’s budget commitments grinds into gear, Prime Minister Lucas Papademos is to meet European Commission President Jose Manuel Barroso on Wednesday ahead of a European summit on Thursday and Friday.
Greece has been under heavy pressure to take swift action following a series of unfulfilled pledges over the past two years to cut spending and reform its shattered economy.
But there has been growing concern that the repeated cuts will stifle any hope of recovery and make it impossible to cut a public debt burden of 160 percent of gross domestic product.
“The European Union has already realised that we cannot move on only with austerity. We need growth,” government spokesman Pantelis Kapsis told a talk-show on Mega television.
(source: Reuters)
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