Talk of new austerity measures dispelled

There are no plans for a fresh reduction to the minimum wage or for the 13th and 14th monthly wages in the private sector to be reduced imminently, the government said on Tuesday as it stressed ahead of a new troika visit next month Greece’s inability to adopt new fiscal measures.

“There is no issue regarding the lowering of the minimum wage before 2016, nor abolishing of the 13th and 14th salaries,” Labor Minister Yiannis Vroutsis said in response to reports over the weekend that claimed the troika would demand such measures when it returns.

Greece reduced its minimum wage to 585 euros last year. At the end of 2016, a new system will be used to calculate the salary level.

Vroutsis’s comments come at a time when the Greek government is trying to form a united line of defense before the troika’s return. Administrative Reform Minister Kyriakos Mitsotakis became the latest cabinet member to suggest that the New Democracy-PASOK coalition, as well as Greek society, would not be able to cope under the possible pressure for new measures in the fall. He added that Prime Minister Antonis Samaras would be raising this issue with US President Barack Obama when the pair meet in Washington tomorrow.

“We can get better value for money and meet the commitments of my country,” Mitsotakis said with regard to public sector reform.

“But our creditors must understand that the main risk today is if they try for more measures – any further attempt to tax incomes will not fly,” he added. “Austerity has been pushed too far. When our prime minister meets with President Obama this month, one of his main messages will be this.”

Mitsotakis’s comments came just a few days after Finance Minister Yannis Stournaras told Reuters that the biggest threat to Greece’s adjustment program was not economic failure but austerity fatigue among coalition MPs. “MPs just reflect the average man or woman in the street – they have to believe that there is light at the end of the tunnel,” he said last week. “If they believe it, they will continue voting the few necessary measures left over; if they don’t, they are not going to. This is the great risk.”