ATHENS, Greece — Greek unions and employers’ associations Friday rejected private-sector wage cuts, as demanded by the country’s international bailout lenders if Athens is to receive a new rescue package and avoid bankruptcy.
The impasse appeared to be holding up final negotiations for massive new debt agreements — a eurozone finance ministers’ meeting, previously scheduled for Monday to back the new proposals, was postponed to later in the week.
Apart from the bailout talks, Greece is also negotiating with its private creditors to take steep losses on their Greek government bonds. More talks on the writedown — which would slash Greece’s national debt by $131.6 billion — will be held in Athens over the weekend.
In a letter to the government Friday, Greek unions and employers said they rejected proposals to slash the minimum wage and further cut annual salaries. Private-sector workers have already suffered a 14 percent loss in income due to emergency taxes imposed since the beginning of 2010, the letter said.
Wage costs have emerged as a major sticking point in negotiations between the government and its rescue creditors — other eurozone countries and the International Monetary Fund — for a new bailout worth at least $170 billion in loans.
Creditors argue that cutting labor costs is essential to making the Greek economy more competitive. Both the unions and employers’ associations counter that the move will only further depress consumer spending and therefore tax revenue.
Without the new bailout deal and bond writedown, Greece risks going bankrupt in late March, when it faces a $18.5 billion bond redemption it cannot afford.
