Greece Must Accept Wage Cut to Avoid Default, Miklos Says

Greece must accept that it needs to cut public and private wages to avoid defaulting on its bonds, Slovak Finance Minister Ivan Miklos said.

Greece “must deliver” by passing concrete laws in parliament in order to win a second aid package from international lenders, Miklos told reporters. The measures must ensure that the country will be able to reduce its state debt to about 120 percent of gross domestic product by 2020, he said.

“We are not satisfied with pledges anymore, we need to see bills being approved,” Miklos said today in Bratislava, Slovakia. “Two of the biggest issues are currently a wage cut and additional measures to cut the deficit by 1 percentage point of GDP.”

Euro-region finance ministers are scheduled to meet later today to discuss the Greek crisis as politicians in Athens still haven’t agreed on meeting all lenders’ demands. Miklos today ruled out beefing up the package above the already agreed 130 billion euros ($172 billion).

Miklos also said he favors the European Central Bank not being involved in the Greek debt write down, preferring bigger private sector involvement instead.

To contact the reporter on this story: Radoslav Tomek in Bratislava at rtomek@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

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