2017-03-08bloomberg.com

"I was informed that this extra payment of 150 euros per month would be in coupons that I can use in supermarkets," said the 45-year-old, declining to provide her last name for fear of losing her job.

Payments in kind are among practices companies are using in Greece as they seek to cap payroll costs, undermining efforts to balance the books of the country's cash-strapped social security system. As creditors push the government to boost its budget surplus, companies avoiding payroll charges and effectively expanding the shadow economy are making the task harder. By some estimates, the so-called black market already accounts for as much as a quarter of Greece's economy.

"Such practices help companies to avoid social contributions, but the burden for the economy is huge," said Panos Tsakloglou, a professor at the Athens University of Economics and Business. "Less contributions for pensions means more budget transfers to them which then leads to more austerity measures to meet fiscal targets, measures that will probably hit pensioners."



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