The Hellenic Radio (ERA): News in English, 10-06-16

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From: The Hellenic Radio (ERA) <www.ert.gr/>

CONTENTS

[01] New Labour Relations at the Gate

Major changes in Greece's labour relations are at the gate. The new provisions, which practically put everything that the agreement provides for into practice, related to the rise in the redundancy threshold and the compensation given in case of redundancy.

The redundancy threshold for companies employing more than 150 people will rise from 2%, its current rate, to 5%, while companies employing between 20 and 150 people will be able to fire 6 people per month. The warning notice period of potential redundancy will be reduced to up to four months, with the compensation paid to the employee reduced to half.

The Greek Employment Minister will meet Thursday with the troika reps to discuss the technical details of the pension reforms, since the Ministry's aims to submit the relevant bill to Parliament by the end of June. News item: 37742

[02] EU Report Sounds the Alarm for Over-indebted Member-States

The 2010 Report on Public Finances in EMU sounded the alarm for the EU member-states whose sovereign debt has increased to unprecedented levels. The report highlighted the need for fiscal consolidation and strengthening surveillance. In particular, the report underlined the deterioration of public finances and the rise in the domestic debts of the EU nations, due to the support measures the European governments took to shield their economies from the fiscal crisis.

Report on Greece: Danger Hasn't Been Overcome

According to the report's figures, Greece's public debt is projected to exceed 130% of GDP in 2011. In Italy, the public debt is expected to amount to 120% of GDP, in Belgium to 100%, in Portugal to 90% and in France to 90%.

The report stressed that the violent fiscal adjustment is the only viable solution for some EU member-states whose debts have shot up to unprecedented level and that the fiscal situation in every nation plays an instrumental part in the shaping of a correct strategy. It also noted that a gradual adjustment based upon spending cuts is much more preferable than a violent adjustment based upon hikes in revenues.

However, the report argued that when it comes to nations whose revenues are not that high, adjustment based on raising the state revenues mainly through the VAT rates hikes, could be effective.

With regard to Greece, the EU report said that under the stability programme followed by the government, the country's public deficit will go down to 9.3% of GDP in 2010. Unless there is a change in the country's financial policy, the deficit will soar again to 9.9% of GDP in 2011.

In other words, were the 2011 budget to have the same characteristics with the those of the 2010 budget, Greece's fiscal deficit would increase by 0.6%.

As for 2010, the report noted that Greece has implemented fiscal adjustment measures mostly based on raising state revenues and less on spending cuts.

Commenting on the years to come, the report underscored that the measures aiming to raise revenues and cut spending will be more balanced.

For the years of 2011, 2012 and 2013, though, the report noted that the fiscal adjustment programmes are not quite detailed and warned of possible delays in the strict implementation of fiscal measures and structural reforms.

Therefore, it stressed that the strict implementation of the measures of the stability programme is not enough, since each country should be ready to take additional measures if necessary.

Concluding, the EU report claimed that Greece's public debt, which ranks among the highest in the EU, has a negative influence on the long-term sustainability of fiscal finances.

Finally, it underlined that the nations which saw their fiscal finances deteriorate significantly during the global financial crisis, were those suffering from low competitiveness and high deficits.

Source: ANA/MPA News item: 37739

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