The push for new cuts in Greece is backed up by ever-increasing “carefully” leaked scenarios of a disorderly Greek bankruptcy as early as March and the expulsion of Greece from the eurozone.
Merkel and Sarkozy are exercising severe pressure on the Greek government to reduce Greek labour costs further towards the levels of Portugal and Bulgaria.
The Greek media were jubilant that Papademos has forced the Troika to withdraw its demand for the abolition of the 13th and 14th months’ wages traditionally paid to Greek workers. But what Papademos has agreed with the Troika will take from Greek workers almost half their annual wages.
The have agreed to cut the private sector minimum wage by 20%, from €750 to €600 per month. After taxation, the net monthly minimum wage will be reduced to €490. Younger workers, under 25, who receive 80% of the minimum wage, will have their monthly wage will be reduced to €480, or below €400 net. All private sector workers who have their wages are determined by national collective bargaining agreements will have their wages reduced by 20%.
They have also agreed to abolish the legal enforceability of the collective bargaining agreements which cover 85% of the private sector workers. The Troika has been very persistent on abolishing “metenegreia”, a pro-working-class law which guarantees that wages and conditions set in a collective bargaining agreement are valid until the next agreed collective bargaining agreement. They cannot be altered by the employer without agreement, and employers are obliged to hire workers under the terms and conditions of the previously collective bargaining agreement.
The abolition of “metenergeia” would remove the safety net for workers and gives the green light to employers to run their workplaces under only the national minimum wage restrictions. It could cut private sector wages a further 20%.
The have also agreed to:
• Abolition of secure permanent eight-hours-a-day employment. Abolition of overtime pay. Power for employers to control their workers’ working hours, unrestricted by any legislation.
• Drastic reductions in the so-called “privileges” of Judges, doctors, lecturers, and the armed forces.
• 15,000 public sector redundancies within 2012, as part of the 150,000 job cuts demanded by the Troika before 2015
• 15% to 20% reductions in auxiliary pensions (“epikourikes”). 30% reduction in the lump sum on retirement).
• A further €3.3 billion cut in public spending.
• Discussions of further cuts in pensions to counteract the effects of the crisis caused for pension funds by the wage cuts and job cuts reducing workers’ contributions.
20% cuts in private-sector wages, on top of the previously imposed reductions on the private sector wages by 26% since 2009, are equivalent to 45% reduction of private sector wages since 2009.
The cuts in private sector wages will affect directly and indirectly the living conditions of the whole working class. If the minimum wage is to be reduced to a meagre €490 per month for 8 hours a day employment, then the current unemployment benefit of €454 per month is likely to be further reduced. This round of measures would amount to a final dismantling of the post World War Two consensus.
The leaders of the three parties in the coalition (Pasok, Laos, and New Democracy), have all been making a show of fighting against the demands of the “big foreign powers” of the Troika, and especially ND leader Antonis Samaras, who hopes to become the new prime minister after elections.
But few Greek workers were convinced. When Samaras was given the chance to overthrow the PASOK government last October and call for elections, he decided instead to join the Papademos government in order to “rescue” the country.
Even when starting his opposition to the abolition of the 13th and 14th months’ wages, Samaras emphasised that he would support their abolition above a certain income threshold. Similarly, Samaras supported a cap of €300 on auxiliary pensions and a cap of €1200 on pensions.
Samaras’s proposal to hire one public sector worker for every 10 that get dismissed or pushed into retirement, and to reduce the hiring of temporary public sector workers by 20%, will destroy the public sector.
If this is what the tough talk of ND amounts to when it is in opposition, one can only imagine the anti-working-class politics that ND would implement if Samaras became the prime minister. In Portugal and Spain, the conservative parties, equivalents of ND, waited for the social democratic parties to be voted down, and when in government they escalated their attacks against the working class. ND’s sister party in Hungary, when in opposition, pretended to fight against the IMF. Now, in government, it is implementing all the IMF-imposed policies and trying to direct the Hungarian working class’s anger against the Roma and other minorities.
Although one more meeting of Papademos and the leaders of the three parties is planned for Tuesday 7th, they have already agreed to the main measures. All the party leaders have also agreed to recapitalise Greece’s banks, making a state contribution of €40 billion without changing the banks’ decision making processes (the shares owed by the state will have limited voting rights).
In other words, all the party leaders have agreed for the state to hand over €40 billion to the bankers.