ECONOMY

Salaries keep falling but at slower pace

Salaries across the Greek economy fell by 1.4 percent in the second quarter of the year compared to the same period in 2013, Hellenic Statistical Authority figures showed on Friday, recording a sharp slowdown from previous quarters.

Greece saw its salaries decline for a 16th consecutive quarter in Q2 2014, while Greece and Cyprus are the only countries among the European Union’s 28 member states to have posted a drop in the last five quarters.

Still, the decline rate in the first two quarters of 2014 in Greece was considerably smaller than in previous years, which reflects a likely end to the salary adjustment seen at the height of the crisis. The salary index, before any adjustments, went down 1.4 percent year-on-year in the April-June period, against a 7.4 percent annual drop registered a year earlier. Taking seasonal adjustment into account, the index went down 1 percent in Q2 of 2014, from 9.1 percent a year earlier.

Since its peak in the last quarter of 2009, the salary index dropped by 25 percent in total. That means workers in the private and public sectors have lost about a quarter of their salary, which is also a result of the increase in taxation and cuts to civil servants’ pay.

The biggest rate of decline in the EU during the second quarter of the year was recorded in Cyprus, at 4.5 percent, as only Greece, Cyprus and Italy were the only EU states to record a drop in the first half of the year.

In contrast, Estonia enjoyed the biggest rise in salaries in Q2, at 7.4 percent year-on-year, followed by Latvia (6.9 percent) and Slovakia (6.1 percent). Spain and Portugal, which recently exited financial support programs, posted respective increases of 1.2 percent and 26 percent.

The biggest yearly drop in Greek salaries in a single quarter was recorded in the January-March 2013 period, amounting to 11.9 percent.

The first quarter of the relentless decline was that straight after the signing of the bailout agreement in May 2010, the second quarter of that year. A drop in the salary index had also been registered in the first and third quarters of 2009.