The Troika has characterised the horizontal cuts in wages and the consecutive hikes as ineffective for Greece. Speaking at a conference on Greek economy, the head of the IMF team, Paul Thomsen, criticized the government for its delays in the reform program, which entail a deeper recession estimated to exceed even 6% of the GDP.
For the same reasons he foresees the skyrocketing of our fiscal deficit to possibly more than 10% of the GDP for this year, instead of the 9% provided in the budget. Thomsen showed that most problems in the Greek economy are issues of delays and not of the impact of the international economic environment.
He noted that the government should move aggressively to the merger or abolition of public utilities and the public servants’ retirement program. He spoke of "non-voluntary employee departures from public services" and the closing down of state institutions, reiterating that the tax-paying capacity of the Greeks has been exhausted.
He emphasized the differences in the timetable of reforms and admitted that any new tax measures or horizontal wage and pension cuts would not bring the required results. Nevertheless, he requested a haircut in collective agreements, especially in the wage castles of public utilities still paying relatively high salaries.
Speaking at the same event, Venizelos recognized the risk of deviations from budgetary targets for 2011 due to spending on social security and health.
As objectives, he set the common axis of national behavior, the return of deposits, a guaranteed level of decent living, the restoration of confidence in society and the message to young people to remain in Greece.
Greece has the elements to emerge from the crisis, said also the head of the EU Task Force for Greece, Horst Reichenbach, proposing a prescription of six interventions for 2012 focusing on reducing bureaucracy, transparency in public procurement, deregulation of professions, removing barriers to business activity, boosting of exports and moderation in wage costs for businesses.