IMF raises again the question of minimum wage reduction

The International Monetary Fund once again raises the question of reducing the minimum wage in Greece just a few hours before the new teleconference meeting of the EuroWorkingGroup for the final disbursement of the 4 billion euros tranche to the country.

In a specific reference to Greece in its new report for the Eurozone, it refers to structural reforms in Member/States, characterizes for the further flexibilisation of labor relations of the utmost importance in order to enhance competition and improve the business climate.

In addition, it proposes to reduce contributions via a budget neutral manner. In 2011, it had proposed that Greece should raise some indirect taxes in order to offset the losses of the insurance funds.

The report notes that there have been major reforms in the labor market in Greece and that minimum wages and allowances are clipped. IMF recognizes that these reductions are not passed on to product prices because they have been utilized by companies to expand their profits.

But the most outrageous thing is that although IMF recognizes all of the above, it proposes new measures such as the reduction in unit labor costs. Thus it brings back the issue of lowering the minimum wage, like a year ago when Christine Lagarde had said that there is room for further reduction of the minimum wage.