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Inflation Rising, Mitsotakis Plans Minimum Wage Raise Again

January 14, 2022

ATHENS – Doing what his rival SYRIZA promised while ruling previously but didn’t, Prime Minister and New Democracy leader Kyriakos Mitsotakis said his government will for a second time increase the minimum wage in Greece.

That’s being done as inflation is cutting deep into the pockets of households and especially affecting those with lower incomes as Greece also imposes a Value Added Tax of 23 percent on food, with supermarket prices soaring.

The government will hike the monthly gross minimum wage by about 2 percent to 663 euros ($760) from this month and there will be a second raise as of May 1, he told Antenna TV, reported the Reuters news agency.

“I estimate that the rise in the minimum wage will be a significant one, it will be much higher than the 2 percent rise,” Mitsotakis said without indicating what it would be by then.
Higher global energy cost was the main driver of inflation that accelerated to 5.1 percent in December, its highest level in 11 years, data from Greece’s statistics service ELSTAT showed, with electric bills jumping 189 percent.

“We estimate that this disturbance (with energy prices) will be more intense in the first three months of 2022 before it subsides,” Mitsotakis said, hoping he won’t take a hit in the polls over inflation and SYRIZA sniping at his handling of the lingering COVID-19 pandemic.

The government has spent about 1.35 billion euros ($1.55 billion) in subsidies to help households and businesses with rising power and gas bills since September and added another 400 million euros ($458 million) in January.

Mitsotakis also expressed cautious optimism over the progress of the ‘Omicron’ variant.

“We saw a sharp increase in cases in Greece at the end of last month. We are already seeing a de-escalation and all the data from other countries show that it is more or less like a summer storm: high intensity, it rises quickly, but it also leaves quickly,” the prime minister said.

“We are aware that the ‘Omicron’ variant causes significantly lower morbidity, although it is much more contagious, that is, it is much more likely that someone will get infected,” he said. However, he explained that its lower morbidity does not mean that we should not be on alert.

The prime minister admitted that the Greek society has cooperated well, with only a few exceptions.

Mitsotakis stressed that Greece managed to keep its economy open. “We have avoided the lockdown. We have saved tourism. And the economy has recorded extremely high growth rates, which will definitely exceed 7 pct.”

On the issue of the national health system, he noted that intensive care units have more than doubled.

“We have hired anyone who was available to offer his services to the national health system. There is no person in the free market today who can help – pulmonologist, anesthesiologist – who wants to be hired and we have not hired him,” the prime minister said and added:

“So we have done what was humanly possible. At the same time, however, with great sincerity, from the first moment, I spoke about the weaknesses of the national health system. More specifically, about the fact that our regional hospitals could not, in moments of pressure, offer the quality of care we would like. This has made us open a substantial discussion on the issue and proceed to bold interventions in the national health system.”

As for the economy, he said that high growth rates were recorded in 2021. “Disposable income has improved for all citizens, taxes have been reduced, tourism has well performed, unemployment rate has dropped, new jobs have been created.”

Asked on the unemployment rates and the recent EU data that show Greece to be a champion in youth unemployment, the prime minister said:

“Unemployment fell from around 17 pct to around 13 pct. And this happened in the midst of a pandemic. We are not going to say that we are satisfied with our performance in the labour market except when unemployment falls to single-digit numbers. This is the goal we have set.”

“We have created more than 50,000 jobs amidst the pandemic. We want to create 80,000 jobs in 2022. We have significant resources for such policies,” Mitsotakis underlined.

Regarding price hikes, he explained that it is an imported phenomenon as a result of higher natural gas prices which have also affected electricity prices.

“From the very first moment we said that we will support households, and now businesses, subsidising part of the increase. Can we fully cover the increase? No, we can not cover the full increase. But we can cover an important part. We did it for households in the last months of 2021, we will do it for as long as this great turmoil in the energy market lasts,” he stressed.

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