Greek Leaders Agreed On “Basic Points” That Will Cause Deeper Recession

Posted by keeptalkinggreece

With the ghost of bankruptcy hunting them Papademos coalition government leaders agreed on four key issue – “basic points”- on the Troika’s demand that will create nothing more than a deeper recession and will crack down the backbone of the Greek economy with wages equal those of a third world country. After the meeting on Sunday that lasted five hours, the office of the Prime Minister issued a statement, saying  that the leaders of socialist PASOK, conservative Nea Dimokratia and far-right LAOS will hold another meeting on Monday -reportedly in the afternoon- to complete the consultations on the new economic programme that is the precondition for the new financial aid to the country.

PM Papademos Office Statement:
The Prime Minister and the political leaders agreed on key issues which are, among others:
 1) The measures in 2012 to reduce public spending by 1.5% of GDP.
2) Ensuring the sustainability of supplementary pension funds.
3) Dealing with the shortage of  competitiveness through measures that include adjustments in various areas, such as reducing the wage and non-wage labor costs, in order to promote employment and economic activity.
4) The recapitalization of banks with combined resources to ensure the promotion of public interest and business autonomy.

After the meeting Antonis Samaras (ND) told reporters “They are asking more recession, I’m fighting to avoid it.” And Giorgos Karatzaferis (LAOS) said “I will not contribute to the eruption of the revolution from poverty that will raze all of Europe.” then they rushed to meet their party officials and deputies, while PASOK called for a meeting with high ranking party officials. Papademos started a further meeting with the Troika representatives.
While Papademos and the political leaders were sitting around the consent table, head of IFF, Charles Dallara was holding a meeting with Finance Minister Evangelos Venizelos and Labour Minister Giorgos Koutroumanis on the Greek bond swap (PSI).
Outside the Greek Parliament some 300 Indignant Greeks had gathered to protest the harsher austerity measures. The protesters were mobilized via social media like Twitter and Facebook. Riot policemen had taken position. Indignant Greeks call for a mass protest on Monday, outside the Parliament at 6 pm.
Public and private sector unions GSEE and ADEDY are reportedly to hold extraordinary meetings planning a 24- or a 48-hour general strike.
Greek media reported on Sunday prime time news that the Troika wants severe cuts in the private sector and massive lay-offs in the public sector:
Troika’s Demands

1) 20% cuts in the wages not only for the youth but for all workers of any age.
2) 30% cuts in the supplementary pensions
3) 20-30% cuts in the gratuity sums
4) Abolition of 13th and 14th salary or equivalent measures amounting 1.5 billion euro.
5) Dismissal of 15,000 civil servants until the end of 2012.
6) Additional austerity measures worth 4.4 billion euro to cover budget deficits of 2011 and 2012.

Measures number 1) and 4) will severely hit the social security funds and consequently the state revenues form tax collection. This can be translated as the definition of vicious circle that will make new-new-new austerity measures inevitable in short and long term.
What Greeks miss in the Troika’s demands is one single sentence about economic growth and development.
I heard on TV (Mega TV) that an Troika official said under conditions of anonymity that ‘only under recession the Greeks will be forced to proceed to structural reforms”. If I didn’t have my damn’ good manners I would say “FFFFback off!”