Do not go into restructuring, but lower your wages again!

By Kostis Plantzos

Greece needs to clip its wages and not restructure its debt, stresses Strauss-Kahn. During his talk in New York, the IMF head publicly denied any consideration of controlled bankruptcy for Greece. He stressed that the IMF supports the efforts of the country and that the Europeans should have decided earlier to support Greece.

At the same time, he sent a message that the actual problem the Greek economy and society have to solve is not the debt, but the lack of competitiveness and the wages.

His words on the Greek issue were characteristic: “it has nothing to do with the debt, but with the competitiveness of the Greek economy. We must restore development in Greece and to achieve this, we must restore its competitiveness”.

And he mentioned this as an example:

“Since the introduction of the euro 12 years ago, increases in public wages in the Eurozone were, at nominal values, 35% on average, more in some countries, less in others. In most countries they were between 30% -40 %, in Germany 17%, which is why it advanced greatly in terms of competitiveness; it is not surprising. In Greece? 100%”!

At this point he stopped for a few moments, made a meaningful grimace and continued: “This is a competitiveness problem. You need to fix it, you cannot avoid it and it has nothing to do with your debt”.


The control of the Troika

But the control of troika, which continues today, and the evidence that the “black hole” in government revenues which instead of closing, becomes greater with each passing month, pave the way for new cuts on wages.

The new data arriving from the tax authorities shows that the shortfall in revenue for March increased by at least 300 million euros, from 865 million in the first two months of the year.

The failures in the budget confirm the need for further cuts in wage costs, the system of exemptions and the granting of social benefits. Only those who have already lived below the poverty line for two years should feel safe. This is because in many cases of allowances the state will consider the income earned in 2010, which was declared this year or even worse, the income that someone had in 2009, even if they never received it again.

However, the technocrats of the Troika, who began the audits at the General Accounting Directorate, are pressing for:

-   reduction of costs and subsidies to SOCs and insurance funds
-   abolition or merger of public companies
-   the least amount of hiring and an indefinite cap on increases
-   integration of gifts and benefits in the basic pay of workers and pentioners, and
-   enforcement of business contracts in the private sector.

A 15-bil-euro menu of privatizations

Privatizations are also being discussed ahead of the critical meeting of the relevant inter-ministerial committee. There, each minister is preparing to give the public buildings under of their jurisdiction to individuals. After the tourist and Olympic property, it’s the turn of the real estate and buildings owned by the Ministry of Rural Development and Food.

The government and the Troika have agreed on a 15-billion revenue with the privatizations that will come until 2013. The State should collect 5 billion from the use of public property, 5 from the sale of government shareholdings in listed companies and another 5 from the sale of assets of unlisted companies.