“N” Interview: EU Commissioner Thyssen focuses on Greek employment sector, reforms and growth stimulus

Thursday, 21 April 2016 05:51
EU/EC/Lieven Creemers/EC - Audiovisual Service: Creemers, Lieven

"We stick to the terms of the agreement"

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The EU’s relevant Commissioner warned that there are “no quick-fix solutions” to quickly reducing joblessness in “hardest hit” Greece, as she admitted, while nevertheless pointing out that the Commission foresees a modest 2-percent increase in Greek employment in 2017. 

In an interview with “N” ahead of her visit to Athens on Thursday, EU Commissioner for Employment & Social Affairs Marianne Thyssen said a more flexible labor market aims to regain competitiveness, with similar reforms already bearing fruit elsewhere in Europe.

She also pointed directly to the “Juncker plan” and other financing schemes as direct Commission and EU initiatives to boost growth in Greece and Europe as a whole.

Vassilis Kostoulas
vkost@naftemporiki.gr
@VasKostoulas
 

What is the European Commission's baseline scenario regarding the evolution of employment in Greece?

In the aftermath of the crisis, millions of people lost their jobs and thousands of families plunged into poverty across Europe. Greece was hit hardest and still today there are too many people who do not have a job and cannot make ends meet. The situation is particularly dramatic for young people. Every second youngster in Greece is unemployed and the number of people who have been out of a job for more than a year doubled as a result of the crisis. However, we do see signs that the situation is improving. Unemployment is slowly going down and employment picking up again. We expect this trend to continue with unemployment dropping to 22.8% in 2017 and employment increasing by 2% by 2017.

What actions does the Commission program include to curb unemployment in Greece?

The Juncker Commission has put jobs and growth centre stage. Our €315 billion Juncker Investment Plan which will hugely boost job creation across Europe. The first Greek project was approved this month and I hope many more will follow. 

In addition, we made 1 billion euro available to help Member States put measures into place to help young people find a job, training or continued education within 4 months of leaving school or becoming unemployed. Greece received €171.5 million euros from this envelope.

We also proposed a package of measures to make it easier for long term unemployed people to find their way back to the labour market. This was approved by all EU member states in record time and I hope to see this political commitment now turned into reality on the ground, not just in Greece but in all Member States.

To what extent does Greece exploit the opportunities offered by the European programs to reduce unemployment?

Greece makes use of the financial support we have put on the table but there are no quick fix solutions to reduce unemployment overnight. Lasting economic growth and job creation must be built on structural reforms, investment and fiscal responsibility. Efforts are ongoing in many member states, including Greece.

The Youth Guarantee for example is now in place in all Member States and starting to show results. The number of young unemployed has reduced by one million over the past two years. Although unemployment is still dramatically high in Greece, also here we see the numbers dropping very slowly. We are now in the process of collecting data from the Member States and before the end of the year we will present how well they are making use of the European tools we put at their disposal.

Αre there targeted actions to halt the brain drain from Greece?

People need to feel that there are real opportunities. Restoring confidence and boosting investments that create jobs are necessary for Greece to prosper and for young people to stay. Moving to another country to work should be a positive choice for people, not a forced one.

The European Commission supports measures that contribute to creating quality jobs and mitigate the effects of the brain drain in Greece. The European Social Fund and the Youth Employment Initiative will fund during the 2014-2020 programming period with EUR 1.7 billion projects that promote sustainable and quality employment.

Is only the recession to blame for the unemployment in Greece or does the European Commission also identify structural problems? For example, in Greece the connection between education and the labor market is particularly poor.

Structural problems have led to high levels of unemployment and poverty in Greece even before the outbreak of the crisis. Greek spending to fight poverty was as high as the EU average before the crisis started, yet the poverty rate was among the highest in Europe. In Greece as many as 60% of employers say they can't find people with the right skills - this is a tragic paradox given the dramatic employment situation. Work needs to be done to bring the education and labour market together more closely. This is exactly what I will aim with the new EU Skills Agenda for Europe which I will present soon and why I meet with more than 50 Greek companies this morning.

Αre there tangible results by the introduction of more flexibility in the Greek labor market, as it was dictated by the adjustment program in the recent years?

Over the decade before to the adjustment programme, Greece lost competitiveness with other euro area Member States. Correcting this was necessary. In a monetary union, wages and prices have to be flexible enough to support adjustments. Increasing flexibility was seen as a way to better cushion the burden of the recession on employment. The profound crisis created a difficult environment. In such cases, social dialogue needs to function fast and effectively to address a changing landscape and emerging challenges.

It is now time to look forward, to remove bottlenecks to job creation and increase potential growth and competitiveness, combining flexibility with a well-functioning social dialogue. Greece is not the only European country to reform its labour market – and by now we have enough evidence that these reforms pay off in terms of accelerating job creation and supporting economic stability.

The release of collective redundancies, on the one hand, are an incentive for investment and, on the other hand, facilitate the loss of jobs, at least in the short-run. What is your opinion about the release of collective redundancies? Do you think that it is something that Greece needs right now?

Collective dismissals are a crucial part of labour legislation and all countries have relevant laws in place. Such laws need to strike a balance between employees' rights and opportunities for companies to be able to adapt to change, particularly in the labour market. It is important to have clear criteria and transparent procedures allowing a fast but fair resolution. Under the programme, a procedure is in place to conduct an independent review to look into these aspects, along with other matters of labour market reform, together with the social partners. On the basis of this review, we will see what further steps need to be taken. This is just one part of a much broader set of issues related to the functioning of the labour market and the establishment of a competitive business environment in Greece.   

Greece needs investments immediately. However, a key feature of the program to date, at least as it has been applied in practice, is the emphasis on taxation, which discourages economic activity and exacerbates the recession. Is this not a choice that undermines the prospect of creating new jobs?

All the efforts and financial support that have been invested aim at bringing Greece out of the crisis and back to growth and job creation. Last Autumn the European Parliament and Member States granted Greece 'a frontloaded access' to EU funds. This frontloading translated into about EUR 2.3 bn accelerated financing for the years 2015 and 2016. EU financing is a crucial factor to uphold investment in real economy at times when access to private investment is still limited. In addition, the Investment Plan for Europe offers a great opportunity to boost investment in Greece. Now that the first Greek project has been approved, I hope more good news will follow soon in Greece.

The Greek Government claims that the institutions and creditors who seek "additional measures, beyond those in the agreement" are responsible for the delay of the Greek program evaluation. What causes the delay of the evaluation and how do you estimate that things will evolve?

We are working in good faith and loyally to successfully conclude the review in line with agreed commitments and targets. The Commission was instrumental in getting the deal done last August on the overall programme and we stick to its terms. We want it to be implemented fully and faithfully, based on a fair assessment, and are working to make that happen as soon as possible.

What is, in your opinion, the appropriate option regarding the Greek pension system? The reduction of pensions or the increase of the contributions? What is your thinking?

The Greek pension system suffered from many shortcomings that had to be addressed. The system needs to become sustainable and fair and the Greek authorities came with a comprehensive proposal to start with. Work on proposals is on-going.

A large number of refugees is being settled in the EU. How easy it is to integrate the refugees in the European labor market and how will the migration issue affect both the Greek and widely the European employment and social security?

Greece has set an example by giving asylum seekers immediate access to the labour market. Member states have up to nine months to grant access but I believe the sooner, the better for the individual and for society.  Quick integration benefits all sides, and labour market participation is a crucial element of that – also in light of our ageing society. 

At least 20% of the European Social Fund – approximately 21 billion euro for the period 2014-2020 – is earmarked for social inclusion. The integration of asylum seekers and refugees can be taken up in those programmes. In addition, before summer the Commission will present a package with actions on the integration of refugees in Europe.

How is employment progressing in the Eurozone and the EU? Has the lost ground been restored by the crisis of 2008?

We have for the first time reached the highest employment rate since 2008. Unemployment is steadily decreasing. Workforce participation is at historically high levels. So we are moving in the right direction but our efforts cannot stop here. We don't want to leave anybody behind.

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