State salaries and pensions get a boost

Rise for 2005 to exceed inflation

Salaries and pensions for public sector workers will increase above the rate of inflation this year, costing the state an extra 720 million euros but not affecting the government’s policy of mild adjustment to EU strictures, Finance Minister Giorgos Alogoskoufis said yesterday.

“We are working so that through the continuous improvement of the Greek economy, the incomes of Greeks can be constantly boosted,” said Alogoskoufis, who presented the measures, which are effective from January 1 this year, a few days earlier than had been forecast.

The minister’s proposals will see basic pay for civil servants increase by 3.6 percent while pensions for public sector employees will rise by 4 percent. Retired military personnel will receive a 5.8 percent hike in their pensions. The figures are significantly above last year’s inflation rate, which stood at 2.9 percent.

Among other measures, Alogoskoufis announced that pensions for farmers and low-salaried workers would increase by 6 percent and the third child allowance for families from 35 to 47 euros a month — a rise of 34 percent. The minister said that the hikes would draw some 720 million euros from this year’s state budget, equivalent to 0.4 percent of gross domestic product for 2005. Alogoskoufis said that the new measures would not affect the government’s well-documented intention to follow an economic policy of steady adjustment.

Responding to charges from PASOK that the measures announced by the minister had failed to live up to New Democracy’s pre-election promises, Alogoskoufis pledged that yesterday was just the first step in the government’s wage and pension policy. “Our aim is for wages and pensions to converge with the European average over the next few years and to fulfill our pre-election promises,” he said.

Meanwhile, workers’ unions said they were not satisfied with the wage and pension increases put forward by Alogoskoufis. Christos Polyzogopoulos, president of General Confederation of Greek Labor (GSEE), Greece’s largest umbrella union, said the proposals were overdue and inadequate to cope with the spiraling cost of living. GSEE is planning three days of protests, from March 15 to 18, over wages, employment and the cost of living. The main civil servants’ union (ADEDY), which also declared itself unhappy with yesterday’s measures, said it would join in the action.