World Economy

Greece Lenders to Launch New Review

Greece Lenders to Launch New ReviewGreece Lenders to Launch New Review

Greece and its creditors start a fresh round of talks this week on reforming its labor market, a tricky task for a leftist government sliding in opinion polls but needed if the recession-hit state can ever win debt relief.

“We are optimistic the second review can be quickly wrapped up to move on with debt relief,” a government official said, Reuters reported.

Under a conservative-led government, Greece froze the mechanism of collective bargaining in 2012, cut minimum wages and liberalized rules covering mass layoffs.

Lenders, particularly the International Monetary Fund, want further liberalization of redundancy rules and to retain the current minimum wage system which is set by law and not collective bargaining as the practice in other EU member states.

It is an incendiary issue in a country where almost two in five are jobless, and many families make do with one earner at home, if at all.

The IMF has yet to decide if it will partake in Greece’s latest bailout program, concerned at Greece’s debt levels exceeding 170% of output. It is however an unlikely ally in Greece’s call for debt relief.

Prime Minister Alexis Tsipras has set the bar high. “I want to be clear. This vague urging for us to ‘do our homework and then we shall see’ cannot be accepted,” he said Thursday night.

Although there is growing consensus among European creditors and the IMF on the need for debt relief, its form and scope remains unclear.


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