Talk of new austerity measures dispelled
There are no plans for a fresh reduction to the minimum wage or for the 13th and 14th monthly wages in the private sector to be reduced imminently, the government said on Tuesday as it stressed ahead of a new troika visit next month Greece’s inability to adopt new fiscal measures.
“There is no issue regarding the lowering of the minimum wage before 2016, nor abolishing of the 13th and 14th salaries,” Labor Minister Yiannis Vroutsis said in response to reports over the weekend that claimed the troika would demand such measures when it returns.
Greece reduced its minimum wage to 585 euros last year. At the end of 2016, a new system will be used to calculate the salary level.
Vroutsis’s comments come at a time when the Greek government is trying to form a united line of defense before the troika’s return. Administrative Reform Minister Kyriakos Mitsotakis became the latest cabinet member to suggest that the New Democracy-PASOK coalition, as well as Greek society, would not be able to cope under the possible pressure for new measures in the fall. He added that Prime Minister Antonis Samaras would be raising this issue with US President Barack Obama when the pair meet in Washington tomorrow.
“We can get better value for money and meet the commitments of my country,” Mitsotakis said with regard to public sector reform.
“But our creditors must understand that the main risk today is if they try for more measures – any further attempt to tax incomes will not fly,” he added. “Austerity has been pushed too far. When our prime minister meets with President Obama this month, one of his main messages will be this.”
Mitsotakis’s comments came just a few days after Finance Minister Yannis Stournaras told Reuters that the biggest threat to Greece’s adjustment program was not economic failure but austerity fatigue among coalition MPs. “MPs just reflect the average man or woman in the street – they have to believe that there is light at the end of the tunnel,” he said last week. “If they believe it, they will continue voting the few necessary measures left over; if they don’t, they are not going to. This is the great risk.”
http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_06/08/2013_513036
OPAP suitor balks over privatization
The terms of the recent privatization of the state lottery seem to have developed into a bone of contention between the government and the sole candidate for the privatization of state-controlled betting firm OPAP – the majority shareholder in Hellenic Lotteries
Only days after the sale of the lottery operating rights to Hellenic Lotteries was signed, Emma Delta, the Greek-Czech consortium selected to buy 33 percent of OPAP, is reported to have threatened to back out if the commissions designated to Hellenic Lotteries’ suppliers and minority shareholders are not reduced by 50 percent.
The remuneration of Hellenic Lotteries’ suppliers and shareholders, Intralot and Scientific Games, which both bought a 16.5 percent share for 31 million euros each, has been set at 3.3 percent of the company’s annual revenues – projected at more than 300 million euros at current prices over the 12 years of the license.
The development comes despite Emma Delta officials having recently told the Financial Times that whatever happens with the privatization of the state lottery, the company will agree to the acquisition of 33 percent of OPAP as agreed with the Greek government.
According to the contract signed with Hellenic Lotteries, Intralot will provide technical support and Scientific Games will undertake the printing of the scratch lottery (Xysto). |
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http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_06/08/2013_512984
Greek debt outlook concerns German coalition’s Fuchs, Schaeffler
Greece will struggle to cut its debt load as envisaged by international assessors even with the return of modest economic growth next year, said German Christian Democratic Union lawmaker Michael Fuchs.
“I’m very much concerned because to me it’s almost impossible to do this without great leaps in economic growth,” Fuchs, a deputy parliamentary leader and economy spokesman for Chancellor Angela Merkel’s CDU, said in a telephone interview on Monday. “You have to look at the math of cutting debt to about 120 percent -- one plus one is two, not three.”
European officials are at odds over how to ease Greece’s burden as Prime Minister Antonis Samaras’s government strives to fulfill the terms of its bailout program through August 2014. While Finance Minister Yannis Stournaras is counting on the euro area to ease debt repayment terms after Greece reports a primary budget surplus, Merkel has ruled out a second writedown of Greek debt, or haircut, as too risky. Her finance minister, Wolfgang Schaeuble, has left open the door to reviewing help for Greece as agreed with euro-area partners.
“Because of some legal arguments there will be no proper haircut, but rather a third program in which interest payments are suspended or Greece gets direct support to circumvent the cut,” Frank Schaeffler, a member of parliament’s Finance Committee who opposed aiding fellow euro members, said by phone. “It won’t be called a haircut, but it will have the same effect.”
In November last year, euro-area finance chiefs agreed to review Greece’s finance needs provided it ran a budget surplus before interest payments. Achieving the goal this year would be a “catalyst” to fill the financing gap from mid-2014, Stournaras said Monday in a Bloomberg Television interview.
Greece’s sputtering efforts to fulfill conditions tied to aid payments in the third quarter are more indicative of its underlying fiscal situation than achieving a primary surplus, said Fuchs. A payment of 2.5 billion euros was only agreed on July 26 after Greece agreed to transfer a group of education ministry workers to a general work pool.
The Greek economy may grow 0.6 percent next year following six years of recession, the European Union Commission forecast on May 3. Unemployment may slip to 26 percent from 27 percent, while debt as a percentage of gross domestic prices will remained unchanged on the year at 175 percent, it said.
“The Greek people are suffering -- if it were German civil servants they too would be out on the streets,” said Fuchs. “They have made progress in reforms and they have to do more even though it will be even more difficult.”
[Bloomberg]
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