NEWS

Wage cut talks a tug-of-war

Greek workers and employers launched talks on private-sector wage cuts Wednesday with both sides trying to avoid any reductions in the minimum wage.

The negotiations, which were blocked last week by Communist protesters, follow intense pressure from debt-crippled Greece?s international bailout creditors for new labor reforms to boost the country?s lagging competitiveness.

The government has warned that if the talks on labor reform prove fruitless it could impose wage cuts by law. Prime Minister Lucas Papademos said failure to address the issue could disrupt Greece?s international cash lifeline, precipitating a bankruptcy in March and Greece?s exit from the 17-nation eurozone.

Greece is in a fourth year of deep recession, with near-record unemployment.

The country?s main GSEE labor union has ruled out any cut in the ?751 ($977) minimum monthly salary, which the SEV employers? federation has also said it wants to avoid. Other potential reforms include suspending automatic salary increases, reducing social security contributions and abolishing or trimming holiday pay known as the 13th and 14th salaries.

Many companies have already forced employees to accept salary cuts to avoid broad-scale layoffs, while workers? income has been sapped by a spate of tax hikes since the European debt crisis began in 2009.

The extra two salaries per year have been slashed in the public sector as part of austerity measures imposed in return for Greece?s first, ?110 billion ($143 billion) bailout it started receiving from its European partners and the International Monetary Fund in May 2010. [AP]