The Greek economy will grow only in 2014 after a four-year recession that contract production by 17%, officials of the European Unionsaid Tuesday, warning that Athens needs to cut wages further to have its government debt at manageable levels.
Hours after the finance ministers of the euro zone agreed to a 130,000 million euro (172,000 million dollars) ransom for Athens, officials said Greece must cut another 150,000 jobs and lower labor costs by 15% over the next three years.
“We hope that Greece will resume its growth in 2014,” a European official told reporters. Officials said the Greek minimum wage remainedhigher than in Portugal and Spain. Greek labor costs have risen by more than 30% in the last decade, the biggest gain in the euro area, compared with 5% in Germany, according to EU data.
As part of the effort of Greece to reduce its debt to 120% of GDP in 2020 from the current 160%, Athens needs to raise 19,000 million euros in 35 privatizations planned between now and 2014.