Moderate wage increases foreseen for 1999

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According to latest government estimates, wage increases in Greece for 1999 are expected to average only 3% in the private sector and 2.5% in the public sector, helping to bring inflation down even further.

Anticipated wage increases during 1999 in the Greek private sector are estimated at about 3%. This figure has resulted from processing of data from 103 branch-level collective agreements which have been signed and submitted to the Ministry of Labour and Social Security. The data show that over 50% of the agreements are of two years' duration, and that wage increases will be held down because both workers and enterprises have taken serious account of the Government's 2% target for inflation in 1999. Thus wage increases in most sectors of activity will not exceed 3%, with the exception of certain sectors such as tourist guides and cosmeticians, whose pay will be increased by 4%-5%.

In the public sector, wage increases are expected to fluctuate between 2% for banks and state-run utilities and enterprises, and 2.5% in the rest of the public sector.

These data, gathered from statements by the Minister of National Economy, indicate that achieving a lower inflation rate in 1999 is the hardest EMU convergence criterion of all, and thus greater increases are out of the question. A circular on practical implementation of incomes policy is expected to be distributed to banks and public corporations at the end of August 1998; it will contain recommendations on the need to keep inflation down to 2%.