GREECE HAS given assurances that public-sector workers and pensioners will be paid on time this month, although its next international bailout payment has been further delayed.
Greek finance minister Evangelos Venizelos said yesterday that as a result of improving trends in revenue collection “we are comfortably placed until mid-November . . . there are no immediate payment problems”.
Civil servants had started to panic at the prospect of October salaries being withheld, just as they received demands for an extra “solidarity” tax on last year’s income, to be paid later this month.
Dozens of protesters blocked access to the finance ministry and other government buildings yesterday. “The heaviest burden already falls on people like us who are taxed at source and may soon see our jobs cut,” said a civil servant picketing the culture ministry building. He was referring to the scheme to cut 30,000 public-sector jobs by December.
While Mr Venizelos sounded confident the loan tranche would be paid in November, he warned that if “society and public-sector managers fail to act responsibly in the critical fourth quarter”, the country’s revised deficit target for 2011 could be derailed.
That would put at risk the 2011-2012 budget deal reached with the EU, ECB and IMF last week and revive fears Greece may be headed for a disorderly default.
Mr Venizelos was speaking the day after Greece’s revised targets – a budget deficit of 8.5 per cent of gross domestic product this year and 6.8 per cent of GDP in 2012 – were approved at a meeting of euro-zone finance ministers.
But EU and IMF officials remained in Athens this week to pursue talks on structural reforms that the government has been reluctant to implement.
Athens is under pressure to adopt a more flexible wage policy, including the abolition of sectoral wage deals, before the EU and IMF agree to release the next loan tranche.
The measure has been raised by the troika on previous monitoring missions but the labour ministry has resisted on grounds it would lead to a sharp fall in the minimum wage of €750 a month. – (Copyright The Financial Times Limited 2011)