Labor market liberalization a 'stumbling block' in talks between Athens, creditors

Wednesday, 08 March 2017 10:28
UPD:10:30
Eurokinissi/ΠΑΝΑΓΟΠΟΥΛΟΣ ΓΙΑΝΝΗΣ

Negotiations on Tuesday, in fact, lasted well into the early morning hours of Wednesday, after creditors' negotiating teams extended their stay in the Greek capital for a day -- a development that came after leaks by both sides referred to "progress" over previous days.

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By S. Papapetros
spapap@naftemporiki.gr

Labor sector liberalization is reportedly the most difficult chapter broached in ongoing talks between the leftist Greek government and representatives of institutional creditors, negotiations aimed to finally conclude the now utterly delayed second review of the third bailout program.

Negotiations on Tuesday, in fact, lasted well into the early morning hours of Wednesday, after creditors' negotiating teams extended their stay in the Greek capital for a day -- a development that came after leaks by both sides referred to "progress" over previous days.

As reported over the recent period, the IMF remained adamant in its position for greater flexibility in Greece's unemployment-swamped labor sector. Conversely, reports said the two sides had mostly converged on proposed social security reforms, i.e. measures to further cut pension expenditures by the state.

In a nutshell, the IMF insists on continuing the current practice -- commenced in Greece over the course of the current economic crisis -- of labor agreements between individual companies and their workforce. The IMF's position is that Greece remains dependent on bailout loans to prop up the state's obligations, i.e. it is a "special case" within the EU and should not rely on best-practice EU labor relations.

The leftist-rightist Tsipras government, on the other hand, wants mandatory collective bargaining on a sector-wide basis to be re-instituted, a nod to its populist grassroots and unions.

Another, albeit lesser, difference revolves around creditors' demand to increase the percentage of employees (in a company with a workforce above 150 people on the payroll) that can be let go as part of mass layoffs on a monthly basis.

The current figure allows for 5 percent of the workforce to be declared redundant, per month. Creditors want the figure to rise to 8 to 10 percent, pointing to the need for troubled companies to be able to more rapidly restructure payroll costs.

Additionally, creditors are pushing for revisions in the law governing labor unions in the public and private sectors, such as mandating that industrial actions must be declared via majority vote (50 percent + 1), instead of the current "show of hands" in deliberative assemblies. Creditors also want to rollback immunity and absence of leave days envisioned in the current framework for professional unionists.

Finally, creditors want the law prohibiting so-called "lock outs" to be abolished.

In terms of the social security front, both sides have reportedly agreed that whatever cuts -- to the tune of 1 percent of GDP -- will take effect in 2019, and not in 2018.

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