Gov’t eyes further belt-tightening

Prime Minister George Papandreou yesterday stressed that the cuts to salaries and pensions foreseen in his government’s austerity measures were unavoidable if the Greek economy is to survive the current debt crisis, adding that privatizations of certain state assets were also on the cards. Addressing top ministers during a Cabinet meeting, Papandreou said that «cheap labor and reduced pensions» were unavoidable measures during the current crisis. Papandreou reportedly raised the issue of privatizations as a possible way of boosting competitiveness – an area in which Greece is seriously lagging – and raising much-needed state funds. Government officials have already said that they are seeking private investment for the loss-making Hellenic Railways Organization (OSE). OSE was one of the enterprises touted earlier this month to Chinese shipping firm Cosco, which already operates the two main container terminals in Piraeus. The government is also mulling the sale of seized real estate as well as the relocation of government offices from rented properties to state-owned plots. According to sources, another prospect mooted by Finance Minister Giorgos Papaconstantinou foresees the merging of certain tax offices and the abolition of others. Another topic of discussion was an agreement signed between Greece and the European Union and International Monetary Fund, in which Greece pledges specific austerity measures in exchange for a multi-billion-euro aid package. The issue came to the fore earlier this week when comments made on television by Labor and Social Insurance Minister Andreas Loverdos appeared to throw into doubt the date pension reforms will come into effect. Sources said that certain Cabinet ministers came under fire at the meeting – Economy, Competitiveness and Merchant Marine Minister Louka Katseli for allegedly failing to keep prices down and Health Minister Mariliza Xenogiannakopoulou for failing to contain wasteful spending in her sector.

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