Latest 'tug-of-war' between creditors, Greek govt over labor reforms

Monday, 03 September 2018 20:55
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By V. Kostoulas

The International Monetary Fund (IMF) is reportedly insisting on its position on no "back-peddling" over previously implemented reforms in Greece's labor market, liberalization that the Fund says is responsible for easing unemployment figures in the country.

On the other side of the aisle, the poll-trailing Tsipras government in Athens has maintained, in statements by various ministers, spokespersons and the Greek prime minister himself, that the liberal reforms aimed to curb workers' rights, something that is a thing of the past with the end of the third (and last) bailout on Aug. 20.

What the coalition government and institutional creditors should now answer is how the unemployment rate fell to 20 percent from 27 percent, where it stood in 2013.

Institutional creditors point to a greater flexibility in the labor market, at least up until September 2018, something achieved via reforms implemented over three successive memorandums.

The leftist-rightist government, however, faced with a general election in 2019 and with flagging support in practically all voter groups, counters that its policies to combat "off-the-books" or grey employment, as well as job subsidy programs, led to the gradual reduction in the jobless rate.

Figures actually show unemployment rates beginning to ease even before leftist SYRIZA won a snap election in January 2015 and formed a government with the small right-wing AN.EL party.

Another high significant factor in the lower jobless rate is a booming tourism sector, something that mainly boosts seasonal and part-time employment.

As far as the World Economic Forum index is concerned, Greece has fallen to 10th place in terms of factors that negatively affect competitiveness.

The pledge by the Tsipras government, in a nod to its grassroots supporters, is to again legislate obligatory collective bargaining agreements between unions and employers' groups, as well as an increase in the minimum monthly wage scale.

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