Greece Draft Cuts Minimum Wage 20%

Greece will pledge permanent spending cuts, including lower pension payments and a 20 percent reduction in the minimum wage, as the economy contracts this year at a faster pace than originally estimated, according to the draft of a new financing deal with the European Union and International Monetary Fund.

“To restore competitiveness and growth, we will accelerate implementation of deep structural reforms in the labor, product and service markets,” according to the letter of intent addressed to IMF Managing Director Christine Lagarde in a document obtained by Bloomberg News.

The letter, attached to the 43-page Greek-language draft agreement, is to be signed by Prime Minister Lucas Papademos, Finance Minister Evangelos Venizelos and Bank of Greece Governor George Provopoulos.

To contact the reporter on this story: Christos Ziotis in Athens at cziotis@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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