Government rules out cuts to wages, pensions, jobs

Further cutbacks in state spending will not be achieved by cutting wages and pensions nor by imposing more taxes, nor by shedding state sector jobs, government spokesman George Petalotis emphasised on Monday.

“There is no chance that measures will be taken to cut wages and pensions, nor taxation beyond that we have announced, nor also dismissals,” the spokesman assured reporters when asked to comment on the talks begun earlier the same day between Finance Minister George Papaconstantinou and EU-IMF inspectors visiting Athens before the 2011 budget is tabled on Thursday.

According to the spokesman, there were margins for further cuts in wasteful public-sector spending and the government would do its utmost to rationalise the way the state operated.

“We will try and will succeed in not reducing the income of citizens further,” he said.

On the issue of raising taxes, Petalotis said that the “existing parameters were open” and that there would not be changes to certain “basic issues”.

Concerning a statement made by Prime Minister George Papandreou criticising Germany’s tough stance on a future debt-restructuring mechanism, Petalotis said that this expressed “our country’s experience on how the EU must proceed, what is meant by the principle of partnership and community solidarity that we had said must be displayed from the start”.

Germany has been pushing for a system that would require bondholders to cover some of the cost of a future bailout to debt-ridden eurozone members, rather than just tax payers. Papandreou on Monday warned that this tough stance could “break backs” and become a self-fulfilling prophecy, forcing some economies to bankruptcy.

Petalotis pointed out that Greece was the first country to try and obtain financial support from its partners in the EU and “thus necessarily became a pool of experience and knowledge concerning the crisis and how this might be overcome”.

The spokesman also denied that any negotiation was underway to remove “harsh” terms from the Memorandum for the bailout mechanism to Greece or to extend the repayment schedule, stressing that there was no discussion on this with the EU-IMF troika nor any official request of the Greek government.