January 28, 2019
ATHENS, Greece (AP) — Greece announced plans to return to bond markets and increase the minimum wage Monday, amid protests against bailout-era measures by farmers who used tractors to block the country’s main highway.
Authorities unveiled plans to issue a 5-year bond, a first market test since the end of Greece’s international bailout in August. In a televised address, Prime Minister Alexis Tsipras said the minimum wage would be increased by nearly 10 percent starting next month — from 586 euros per month to 650 euros. A lower wage category for under-25 year-olds was scrapped.
“This is an essential but also a symbolic action — something owed to the people who bore the brunt of the (country’s) bankruptcy and fiscal adjustment, whose lives, prospects and expectations were immersed into the darkness of the crisis,” he said. “Now that the country is coming out of the crisis, we can gradually begin to heal the wounds.”
The increase, while slightly larger than expected, does not restore the minimum wage to the 751-euro level it was in 2012, when huge cuts were imposed as part of Greece’s bailout agreements. As Tsipras held the cabinet meeting, protesting farmers used more than 200 tractors to block Greece’s main north-south highway outside the central city of Larissa. Drivers were forced to take a detour around the blockade using secondary roads.
The protesters are demanding that the government scrap tax increases and pension measures introduced during the bailout programs, and are seeking intervention to address what they describe as unfair market practices from large buyers.
“The government didn’t listen to us and we need (market) prices that allow us to make a living,” protest leader Rizos Maroudas told the AP. The Greek bond auction, meanwhile, is expected to take place as early as this week and raise up to 3 billion euros ($3.4 billion).
Greece has held off returning to debt markets due to financial turbulence created by a budget crisis in Italy. But borrowing rates eased in recent weeks and the government last week survived the threat of collapse over a vote in parliament to normalize relations with neighbor Macedonia. Representatives of Greece’s international creditors also completed an inspection in Athens last week.
The yield on Greece’s 10-year-bond edged down on Monday to 4.06 percent while shares on the Athens Stock Exchange were unchanged. Tsipras, whose left-wing government is trailing conservatives in opinion polls, is facing local government and European Parliament elections in May and must call a general election before October.
Kantouris reported from Thessaloniki, Greece