Pledge for no pay cuts in 2011

Finance Minister Giorgos Papaconstantinou promised yesterday that the government would not repeat in 2011 the «exceptionally unpleasant» measures it was forced to take in 2010, such as cutting public sector salaries and pensions. Papaconstantinou was speaking to President Karolos Papoulias before the last session of negotiations with the representatives of the European Commission, European Central Bank and International Monetary Fund, which were extended by another day for what the government explained as »technical reasons.» Negotiations concluded late in the evening, with the representatives of Greece’s creditors set to announce their conclusions and the key points in the adjustment of the memorandum of agreement between the two sides at a press conference this morning in Athens. Papaconstantinou told Papoulias that talks were focusing on the major structural issues, such as the changes required in the public sector, at state corporations and in the labor market as well as an improvement in the country’s competitiveness. He also stressed the agreement on the draft budget already tabled in Parliament. When Papoulias asked the minister why the talks had stalled, Papaconstantinou replied, «They have not stalled, there is a series of issues that are hard and require negotiation, and that is what we are doing.» Reports suggested last night that, according to the agreement reached, the transfers of employees at state companies will now be considered as new hirings and come under the rule for one hiring for every five departures in the state sector. The EU and IMF auditors detected a slowdown in the government’s efforts to apply the original agreement. They called for an acceleration in the process for the new tax bill and the combating of tax evasion, as well as the opening of all closed-shop professions, without exception. According to sources, there was also agreement on establishing a specific duration for in-house pay pacts, ranging from one to two years, with a variation of up to 15-20 percent from the sector’s collective labor agreement. For the duration of the in-house pact, no sackings would be permitted. The full text of the new agreement will be published within the next two weeks. Its terms will then be discussed with various social bodies in the coming weeks.