Message #17284

[Psalm 51:17]

2/8/12

Greece Draft Cuts Minimum Wage 20%

Greece will pledge permanent spending cuts, including lower pension payments and a 20 percent reduction in the minimum wage, as the economy contracts this year at a faster pace than originally estimated, according to the draft of a new financing deal with the European Union and International Monetary Fund.

“To restore competitiveness and growth, we will accelerate implementation of deep structural reforms in the labor, product and service markets,” according to the letter of intent addressed to IMF Managing Director Christine Lagarde in a document obtained by Bloomberg News.

The letter, attached to the 43-page Greek-language draft agreement, is to be signed by Prime Minister Lucas Papademos, Finance Minister Evangelos Venizelos and Bank of Greece Governor George Provopoulos. The draft is the focus of a meeting Papademos is having in Athens today to seek approval from the leaders of the three parties supporting his government to secure a 130 billion-euro ($172 billion) rescue plan ahead of an emergency euro-area finance minister meeting in Brussels tomorrow.

While no information was provided about the finance chiefs’ agenda at the meeting tomorrow, the scheduling suggests policy makers, who have to ratify the Greek accord, were optimistic about negotiators reaching an agreement in Athens.

more

http://www.bloomberg.com/news/2012-02-08/greece-to-pledge-20-cut-in-minimum-wage-pension-cut-draft-accord-shows.html