February 3, 2012
Greek unions and employers' associations have blocked a critical element of a rescue deal put forward by the European Union, accusing negotiators of crippling the economy with wage cuts and tax rises that will undermine growth.
In a joint letter to the Greek prime minister, Lucas Papademos, the employers and unions said a cut in the minimum wage was non-negotiable and the focus of talks should switch to the tax system, the complexity of regulation and corruption.
Athens is under pressure to wrap up talks on a bond swap and a €130bn (£108bn) bailout to avert a chaotic default. But hopes of an imminent deal faded after eurozone finance ministers put off a meeting expected on Monday to finalise the rescue. The ministers may meet later next week instead, said its head, Jean-Claude Juncker.
The unions' and employers' statement undermined efforts by the coalition government to agree a package of reforms as demanded by the country's international lenders if Athens is to receive the crucial €130bn second rescue package.
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