My Portugal Property

Create a My Portugal Property profile

It's free to use and allows you to:

Receive email alerts for relevant properties
Save & Rate your favourite properties
Save relevant searches

My Portugal Property

Create account

I agree to the Terms and Privacy Policy.

I would like to receive the PortugalProperty.com newsletter

My Portugal Property

Next steps

In the next few minutes we will be sending you an account activation email. Please check to see if you've received the email and click on the 'Activate your account' button in the email.

My Portugal Property

Reset your password

Greeks: Taking a Lesson in the Economics of Recovery

Published on 20th April, 2012

Greece is one of the hardest-hit European nations in the global economic recession with high deficits, public debt and unemployment being the most worrisome aspects. The European Union (EU) and the International Monetary Fund (IMF) have extended financial resources to the beleaguered nation but not without fiscal tightening, social deregulation and economic reforms.

Of all these conditions for financial aid, one particular measure stands out: Cutting the minimum wage by as much as 32% for young Greek workers while others will experience 22% wage cuts. It is a polarizing measure, indeed, but one that the EU and IMF are strongly in favor of.

According to Poul Thomsen, the IMF mission leader to Greece, the reduction of minimum wages in Greece had to be reduced. He noted that these were well above the EU average as well as higher than those of Spain by 20% and of Portugal by 50%.

Even the increases in minimum wage from 2000 to 2009 were higher in Greece – 60% - in comparison with the EU average of just 40%, he added. In comparison with their Spanish and Portuguese counterparts who earn minimum wages of €748 and €570, respectively, Greeks earn at least €870 a month. The amount was calculated over a 12-month period.

With the planned minimum wage cuts, Thomsen said that the soaring youth unemployment in Greece can be lessened. This will then have a positive impact on the rest of the economic factors including public debt, and interest rates and investments.

The drastic cut in minimum wages started in May 2010 when Greece signed the first bailout agreement. During this period, workers in the public sector enjoyed 13th and 14th month payments, which were seen as an unwarranted privilege.

In 2011, wages in the private sector quickly followed the lead of the public sector. Companies were allowed to deviate from the sector-level agreements already agreed upon with most opting for reductions in minimum wage.

With the subsequent transfer of rights to bargain from representative unions to newly-established worker associations comprising at least 5 workers, wages in both public and private sectors have come crashing down.

With the lower minimum wage, Greek workers are now receiving wages roughly on par with Portugal – approximately €586 a month, which represents a 32% cut for workers under the age of 25.

These austerity measures have been a bitter pill to swallow for most Greeks but for economic recovery to happen, swallowing appears to be the only option left. It is hoped that the greeks will learn from Portugal and the way they are handling the recovery of their economy.

For information on Property for sale in Portugal contact the Portugal Property team via email at: info@portugalproperty.com or call free on +44(0) 800 0148201

Published in: News and Updates