Brussels, 18/09/2012 (Agence Europe) - Under the impact of the austerity measures laid down by its international lenders (including pay cuts and a compulsory reduction in minimum pay), Greece recorded the greatest reductions in unit labour costs among EU27 countries, explained Eurostat on Tuesday 18 September.
Unit labour costs are the costs that an employer (company or civil service) has to pay for each employee for one hour of labour. In the first quarter of 2012 compared with the first quarter of 2011, unit labour costs fell by 11.5% in Greece, according to figures released for the first time by Eurostat. This may amount to an increase in productivity, demanded by the country's lenders to try and get the economy out of the doldrums - it is verging on depression, with GDP expected to fall by 25% from 2008 to 2014, according to Greek finance minister Yannis Stournaras. This increase in Greece's competitiveness contrasts with an average 1.5% rise in unit labour costs in eurozone countries and 1.4% in the EU27 over the same period.
In the first quarter of 2012, all other EU27 countries (apart from Portugal (-1.2%) and Slovenia (-1.3%)) saw unit labour costs stand at the same level or increase. In Greece, in private companies in Q1 2012, unit labour costs fell by 8.9% and by 15.7% in the non-commercial sector, reflecting the scale of pay cuts in the public sector under the various austerity programmes introduced under pressure from the country's lenders. In the private sector, construction saw the greatest cuts, with unit labour costs falling by 18.4% in Q1 2012 compared with Q1 2011, followed by industry (-11.1%) and services (-4.4%).
Media reports suggest that Stournaras, who is negotiating another round of austerity measures with the country's lenders, briefed the meeting of eurozone finance ministers in Nicosia on Friday about the situation and these figures, pointing out that no further pay cuts were needed. On 1 January 2012, the minimum wage in Greece was cut by 22%, and by 32% for under-25-year-olds. (LC/transl.fl)