EU and IMF demand that Greek salaries reach the level of Bulgarian ones

The International Monetary Fund, the European Commission and the European Central Bank requested from Greece to introduce new levels of wages, commented the Greek Ethnos daily. According to the publication, creditors insisted on the reduction of the minimum wage and on the introduction of supplementary pensions. They also urged for trimming the 13th and 14th salary and on freezing the scheduled increase in the people's incomes and salaries with the intent to level them with those in Bulgaria, but mostly called upon prompt and urgent reforms of the labour market.

These are only part of the requirements for granting a new rescue package to Greece. Its exact amount should become clear today at the summit of the EU leaders in Brussels. In October, Europe and the IMF agreed to extend a bailout of €130 bn, but only in case Athens undertakes the commitment to write down its debt from 160% to 120% of GDP. Since then, however, the deterioration of the Greek economy and the budget deficit, which expanded to about 10% of GDP, have brought these forecasts into question. Therefore, some official representatives of the Euroarea and the IMF indicated that Greece would need a further bailout tranche of €15 bn.

Another item on the summit agenda refers to the terms and conditions of the agreement with the private creditors of Greece, who must sign a debt write-down of some €100 bn. 

A few weeks ago, the negotiations came to a stall since the proposed average rate on the new bonds was higher than the one the EU was willing to approve. But according to the recent official statements on the part of the creditors and Greece, the talks have already marked a considerable progress and the conclusion of the final deal must be announced this week along with the new bailout programme.

"We are really close to reaching an agreement,'' indicated over the weekend, Greek Finance Minister Evangelos Venizelos. Probably, the private holders of Greek debt are willing to accept the introduction of the average interest rate below 4 percent for the 30-year bonds, which was the stipulation of the financial ministers of the Euroarea.Without receiving new bailout tranche, our southern neighbour practically will not be able to repay its loan of €14.4 bn in March and it may become the first country in the 11-year history of the Monetary Union, which will fall into complete bankruptcy.

Another proposal, which was not supported by the European Commission, came from Germany. It demanded from Greece to abandon its sovereignty in the field of tax policy and allow it to be monitored by a European Commissioner, reported the Financial Times. According to the newspaper, Berlin proposed that the European Commissioner, appointed by the Eurozone finance ministers, should be empowered to veto the budget decisions of the Greek government. "Given the disappointing compliance of Greece with the stipulated requirements of the financial programmes, the country should adopt a transfer of its budget sovereignty to the EU for some time," considered the German government. Thus, Athens will be forced to pass a law for covering the debt expenditures on the first place before servicing any other public benefits.

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