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The Troika: The biggest threat to Greece is the delay of reforms

23 November 2010 / 13:11:45  GRReporter
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Servaas Deroose was more specific. He said that wages in Greece were two times higher than the Eurozone average in the last 10 years before the crisis. This made the Greek economy extremely uncompetitive. One reason for the disproportionately large salaries is the collective labour agreements. They must be changed. Their mandatory renewal should be cancelled and a more flexible legislation is needed in the initial bargaining, advised the expert. He clarified that it is not about reducing the minimum wage. In his opinion, the closed professions are the second reason for the big salaries. The Troika’s recommendation is to seek ways to improve productivity.

The common issue of the Greek debt restructuring was not saved to the Washington, Brussels and Frankfurt technocrats. Poul Thomsen said that the 110 billion euro support is for a period of three years. Under the terms of the agreement, the payment of the loan will begin 1-2 years after completion of the three-year program. It is expected that Greece will return to the markets by that time. Poul Thomsen admitted that it is not clear whether the country will be able to settle with its old creditors and to pay the loan from the IMF, the European Commission and the European Central Bank. According to him, any benefit from the possible rescheduling of the Greek debt will be swept away by the high interest rates of international markets and the collapse of the investor interest. He said that the case now is not what would happen if Greece would be unable to pay its debts. There are many options, according to him, if this happens - it is possible new debts to follow, the program is possible to be extended. But the most important thing for now is the country to restore its competitiveness in the Eurozone, is the opinion of Mr. Thomsen.

Servaas Deroose denied on his part that there are negotiations for additional measures for the 2012-2014period. He confirmed that such measures are necessary. He announced that there will be additional measures, but they are not defined yet. The Minister of Finance will begin to examine them in January, said the expert.

Tags: Economic crisisInternational Monetary FundLoanDebt rescheduling
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