Converging demands

Following hard on the heels of Prime Minister Costas Simitis’s promises of handouts for various social groups, market forces and powerful special interests have sprung into action, piling pressure on the PASOK government from conflicting sides. The Athens Stock Exchange general index took a 2.55-percent fall yesterday, partly because of fears over the cost of the «social package,» while, at the same time, special interest groups, such as unions, began to press for wage increases and other benefits. This climate of concern on one side and increasing demands from the other is expected to intensify with Simitis’s unveiling tomorrow of the so-called «Convergence Charter,» a series of measures intended to bring Greeks closer to their partners in the EU economically and socially. Among other things, the Charter is expected to promise wage increases, in real terms, of 1.5 percent to 2 percent annually in order to bring average Greeks’ wages up to 88-90 percent of the EU average by 2008. The Convergence Charter is expected to provide the central focus of the political campaigns in the runup to national elections, which must be held by May at the latest. The main opposition New Democracy party, which is leading PASOK by about 8 percent in opinion polls, has presented what it calls the «Divergence Charter,» holding up PASOK’s past promises to what ND calls the ruling party’s failures. ND will also try to cast doubt on the government’s promises of an annual growth rate of 4.5-5 percent of GDP and the reduction of unemployment to 6.5 percent. Among the special interests expected to place great strain on the government are schoolteachers, university professors and even gas station owners, who are threatening to strike from tomorrow if they are forced to apply a law demanding cash machines on every pump. The pre-election climate, the cost of the social spending (which Simitis put at 2.6 billion euros on Sunday, stressing that this would come out of the economy’s growth rate), and the increased supply in shares (following the decision by Alpha Bank and National Bank, and possibly Commercial Bank) to sell large packages, have put pressure on the stock exchange. The general index has lost 5.46 percent in the last six sessions, with yesterday’s the worst, when it closed at 2,091.70 points.

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