Greek unions and bosses reject wage cuts

Greek unions joined with employers to tell the Greek government enough was enough, turning down proposed pay cuts. The government is caught between demands from the international troika – the European Union, the European Central Bank and the International Monetary Fund – to cut expenses or risk losing a second round of international aid, Voice of America reported Saturday. The government is working to secure about $39 billion in aid that would allow it to meet its debt obligations that come due March 20. In a rare show of solidarity, union workers and management groups have turned down an offer to reduce the minimum wage, saying a wage earner's loss of 14 percent of his or her buying power in the past two years is already unacceptable. The New York Times reported Saturday there were substantial rumors that Greek Prime Minister Lucas Papademos, a banker turned politician who has been in office only three months, had threatened to resign over the failure to garner support for the minimum wage reduction. The Times said Papademos had limited experience with the "blood sport of Greek politics," but that the government quickly denied the prime minister was ready to quit. Economists Yannis Stournaras said the social costs of the troika's proposals outweighed the financial benefits. "The effect on competitiveness is very small, but the social impact is huge," Stournaras said. In Greece, the minimum wage amounts to about $1,000 per month. The troika is asking for a cut to $750 per month, despite high costs of living. A gallon of gasoline in Greece costs more than $8, the Times said.