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Victoria Mindova

"The Memorandum’s success depends on structural changes, not on budget cuts," Greek industrialists are firm. The president of the Hellenic Federation of Enterprises Dimitris Daskalopoulos stated at a press conference that he was extremely disappointed with how the rescue programme for Greece was being carried out. It is moving along the periphery of the problems of the local economy and does not offer solutions to the real obstacles that hamper the country from becoming competitive and productive again.

"The representatives of the Troika stick to cuts and raising taxes without being equally determined when it comes to the implementation of structural reforms that are our only chance of success," Daskalopoulos said. He accused the representatives of the International Monetary Fund, the European Central Bank and the European Commission of taking part in the theatre of the local political system, avoiding the most important structural reforms. According to the businessmen, they are associated with the "cleanup" of public administration, state monopolies in various sectors and corrupt trade unions, which protect their private rather than public interests.

"Maybe tomorrow we will really get the next tranche, which, in the best case, will give us a little more time in the euro area. There will be no funds to continue the old political practices. If we do not change, we will not have a chance to go forward," Daskalopoulos was adamant.

Meanwhile, the European statistics office Eurostat announced that Greece's foreign debt for the second quarter of 2012 has reached 300.8 billion euro, or 150.5% of GDP. Despite the haircut of the nominal value of government bonds, it remains the highest in comparison with other EU countries - Italy's debt is 126.1%, Portugal's is 117.5% of GDP and the Irish debt is 111.5% of GDP. The countries with the lowest foreign debt in the European Union are Estonia with 7.3% of GDP and Bulgaria with 16.5% of GDP.

Industrialists insist that there will be no healthy development of the economy unless the market is liberalized and bureaucratic obstacles to business are removed. The country will continue to depend on expensive short-term loans and international aid that will keep the economy half-dead and foreign debt will continue to grow. A schizophrenic approach to business, which has been blamed for high prices, profits and other hardships, has been burdened with huge taxes in a market that does not allow development, Daskalopoulos told reporters. "In this situation, it is quite natural for large enterprises to leave the country."

With respect to the change in the labour relations, which is the basis of the government's crisis this week, Daskalopoulos said that additional cuts should not be made. "Our position is that there is no need to further reduce the minimum wage in Greece," said the industrialist, who avoided answering the question of whether he agrees with the reduction of redundancy compensation for employees with long years of service.

Daskalopoulos said that today, the issues related to the labour market were in the hands of the government and the lenders because from 2009 up to now, the social partners had failed to find a common language to reach a consensus. The industrialist shifted more of the responsibility for the developments on the trade union of private sector employees (GSEE), which has rejected in a series of meetings any suggestion of employers' organizations.

The proposal, which proved to be at the bottom of the split between the political parties of the government coalition, is the reduction of the total amount of redundancy compensation. The Troika insists that the number of wages paid as compensation to employees with long  years of service should not exceed 12 and that the prior notice term should be reduced to three months. The law stipulates that employees with 16 years of service are entitled today to 14 full wages if they have not received a prior notice of dismissal six months before the dismissal.

Furthermore, employees who have more than 16 years of service now receive six additional full wages in addition to the 14 salaries, if the employers dismiss them without six-month's prior notice. The lenders’ supervisory Troika believe that in the current market uncertainty it is unrealistic to know if you have to dismiss employees after six months. So, it insists on the reduction of the prior notice term and that the six wages in addition to the compensation should not exceed the minimum wage, which is 586 euro at present.

According to the latest information, Minister of Finance Yiannis Stournaras stated that the talks with the supervisors would be completed by Monday, when the Εuro Working Group will meet. It seems that the issue of changing the labour laws will remain outside the debate in parliament. "All night we were negotiating (by phone) with the Troika. We have now reached greater concessions from the lenders. They have agreed to reduce the additional wage after 16 years of service to 2,000 euro and the prior notice term has fallen from three to four months," the minister had said during a parliament lobby. It remains for the end of negotiations to be officially announced by political leaders and then be confirmed by international lenders.