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“Growth is here,” says minister as Greeks face new income cuts

“Growth in 2017 is a fact, not wishful thinking,” Economy and Development minister Dimitris Papadimitriou said on Wednesday. The year 2017 will be time for real growth in Greece the minister said and assured that there are no new measures to burden the people “from now until 2018”, while in 2019 there will be austerity measures but also counter ‘social’ measures that will alleviate the pain of the people.

According to Hellenic Statistical Authority ELSTAT, Greek inflation rate slowed to 1.6 pct in April, from 1.7 pct in March, but remained up compared with -1.3 pct in April 2016.

In its monthly report ELSTAT attributed this development to price increases as well as declines:

  • price increases: 1.9 pct in food/beverage, 5.8 pct in alcohol/tobacco, 3.3 pct in housing, 6.8 pct in transport, 2.1 pct in communication, 1.9 pct in hotel/restaurant.
  • price declines: 0.2 pct in clothing/footwear, 3.2 pct in durable goods, 2.8 pct in health, 1.3 pct in entertainment, 0.3 pct in education and 2.2 pct in other goods and services

The price increases have been due to extra charges in fees and taxes imposed as of 1.1.2017.

The consumer price index rose 0.6 pct in April from March 2017, after a 0.7 pct increase recorded in the same period last year, the ELSTAT said.

In the same month, hiring in the private sector record an increase. According to state Erganis system, 224,181 people were hired in April striking “a record for the first time since 2001” Labor minister Efi Ahtsioglu said.

  • 55%: 123,101 people were hired in full time contracts
  • 33%: 74,265 people were hired part-time
  • 12: 26,815 people were hired in rotation work

At the same time, 132,049 people lost their jobs. Half of them left voluntarily, the other half because their work contracts were expired.

With Greece and creditors close to the concussion of the second review of the Greek program, Greek bonds reached the lowest yield, while the Athens Stock Exchange is moving at levels of 770 basic point units.

The yield of Greece’s most traded 10-year bond has hit its lowest since 2012, Financial Times wrote.

“Greece’s benchmark yield, a barometer for the markets’ take on the state of the country after nearly €350bn of bailouts, has slipped five basis points (0.05 percentage points) to a fresh low of 5.49 per cent” on May 9 2017.

Theoretically, Greece is doing economically well, is ready to return to the markets.

Practically, Greeks suffer income losses day by day, month by month, year by year due to price increases, pension cuts and low wages for the lucky ones who get a job.

The moment economic figures show improvement and promise a growth, a bunch of new measures comes to push another thousands of people into poverty. No matter what minister Papadimitriou claims -‘no measures in 2017 and 2018’- fact is that the internal devaluation continues. If the minister takes a look into what the government agreed with creditors, he will see that there are still outstanding prior actions to be implemented under the current Greek program; these include further cuts in benefits, poverty allowances and in the welfare state. Not to mention the increased social security contributions for self-employed and freelancers.

Some Greeks feel truly blessed to have even a 500-euro income per month.

Unless Greeks see ‘growth’ affects their real lives what minister claims is just the usual politicians’ talk.

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