Greece urged to lower minimum wage to boost jobs
(ATHENS) - The European Union on Thursday urged Greece to lower its minimum wage, which is much higher than in EU countries with a similar standard of living, in order to lower its ballooning unemployment.
"The minimum wage is higher than those of other member countries at the same economic level and social partners should see whether this is an obstacle to the creation of jobs," Matthias Mors, a European Commission representative and part of the EU, IMF and European Central Bank 'troika' auditors currently in Greece, told the Kathimerini daily.
The Greek minimum wage stands at 750 euros (1,032 dollars) per month. Unemployment in 2011 shot up to 16 percent.
But unions argue that the cost of living in Athens is much higher than the national average on which comparisons to other EU states is based.
On Tuesday the 'troika' said it had concluded a drawn-out audit of Greece's economic recovery programme, paving the way for bankruptcy-saving loan funds. But they called for more reform measures after 2012.
"We agreed with the authorities on additional measures worth five billion euros," Mors said.
The Greek government ought in the next six months to determine extra steps to meet fiscal targets for 2013 and 2014, he added.
"We are at a critical moment when Greece must persuade the international community and other eurozone states that it has the determination and can achieve the goals it has committed itself to," he said.
The EU official admitted that the audit mission had "underestimated" the depth of the recession gripping Greece -- which unions say is a direct effect of the tough austerity measures imposed on the country.
Instead of an expected contraction of 3.8 percent of output, the Greek economy will shrink by 5.5 percent this year according to the finance ministry.
The 'troika' auditors are expected to deliver their report to the Eurogroup and the International Monetary Fund executive board by October 24.
Acknowledged progress on its fiscal objectives will earn Greece a loan instalment of eight billion euros, part of a 110-billion-euro bailout package agreed last year, which it needs to pay next month's bills.
Athens is also in talks with its eurozone peers to extend the scope of a debt rollover to help it keep up with maturing loan payments.
Greek Prime Minister George Papandreou on Thursday flew to Brussels for meetings on the topic with European Council president Herman Van Rompuy and eurozone chief Jean-Claude Juncker.
"We are negotiating in every way possible to reduce the debt," Papandreou told his ministers on Wednesday.
It has a sovereign debt of over 350 billion euros ($480 billion) and faces interest repayments of 17.9 billion euros in 2012, up from 16.3 billion euros in 2011.