Greece will raise its gross monthly minimum wage by 4.5% from April, the sixth rise in four years, it said on Thursday, as it seeks to restore living standards battered by a decade-long financial crisis and shield consumers from rising energy costs amid the Iran conflict.
Greece is recovering strongly from a 2009-2018 debt crisis that wiped out nearly a fourth of its output and slashed pensions and wages as part of austerity in exchange for €290 billion ($335 billion) in bailout loans.
The center-right government of Prime Minister Kyriakos Mitsotakis, who won a second term in 2023, has cut taxes and social security contributions and increased the minimum salary for full-time employees five times since 2022 as it targets a minimum monthly salary of €950 by 2027.
But purchasing power in the country still trails the European average and is taking a fresh blow from surging energy prices stemming from the ongoing US-Israeli war with Iran and fueling inflation.
Greece has imposed a cap on profit margins on fuel and some supermarket goods and last week announced subsidies for fuel and fertilizers and ferry ticket discounts.
“To further support the people, we will jointly decide today a new rise in the minimum wage from April 1,” Mitsotakis told a cabinet meeting on Thursday. He said his labor minister will propose that the gross monthly minimum wage be increased to €920 from €880 from April 1.
The government consults employers and employees before setting the minimum wage which needs cabinet approval to take effect. [Reuters]