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Greek salaries reached 2005 levels in the first quarter of 2013 as shown by the National Statistics Institute ELSTAT, which has made a retrospective analysis of the average salary in the country from the beginning of 2006 to March 2013.

After two Memoranda of financial support, a series of fiscal consolidation measures and internal devaluation to boost competitiveness by reducing the cost of labour, salaries in the country have dropped to the levels which we knew seven years ago. This, coupled with the significant increase in unemployment, has led to a decrease in the revenue to the state treasury despite the dramatic increase in taxes.

The index of salaries of ELSTAT shows a decline of 18% in the first quarter of this year compared to the same period of 2011. At the same time, GDP continues to shrink and it is expected that it will approach 2005 levels by the end of 2013.

In 2005, Greece's GDP was 193 billion euro. Preliminary economic analyses show that this year it will not exceed 195 billion euro in the best-case scenario.

Minister of Employment and Social Security Yiannis Vroutsis claims that salaries and pensions in Greece will not be further reduced by 2016. The news portal fifernews.gr reports that the creation of more flexible labour relationships will help combat unemployment.

The same source states that the reduction in the minimum salary from 584 to 350 euro which is applicable at present will improve employment by 4%. Currently, the rate of unemployment is less than 27% whereas it was 9.9% in 2005. The opponents of the new salary cuts comment that the 4% reduction in unemployment cannot compensate for the general impoverishment of the people in Greece who have already lost 30% of their standard of living compared to the period before the economic crisis.

The proposal to reduce the unemployment rate by a further cut in the salaries belongs to the European Commission task force headed by Horst Reichenbach. According to the information announced, the changes can take effect as early as 1 January 2017. By that time, Greece should have regained its positive economic growth and should have been able to repay alone its obligations to foreign lenders.

The European consultants encourage the government to pass a ministerial decision to exempt the employers from the obligation to retain the number of employees in the company if they strike against the new measures. Analysts believe that the level of salaries is not guaranteed while the country obtains steady economic growth.

The index which measures the level of salaries in the country incorporates average salaries of key sectors, including mining and quarrying, production, retail and wholesale trade, water, sewage and waste management, logistics, tourism, information and telecommunication services, real estate, financial and insurance services, administrative and support services.