European Trade Union Institute, ETUI.

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25 September 2018

Greece: the restoration of modern industrial relations will be a long and winding road

This summer, Greece finally exited its bailout, almost ten years after the financial crisis exploded. The work of the troika and the euro-area creditor countries has transformed the country’s economy and the lives of its people. The industrial relation system was dismantled and the effect on wages was dramatic. The government has now announced a return to a decent system with collective bargaining and extension of collective agreements.

The program that was dictated by the country’s creditors led to the reform of the collective bargaining system, cuts in the minimum wage and a reduction of the public workforce (by 150,000 jobs). The main argument was that labour costs were outpacing productivity growth. The creditors dictated painful structural reforms such as cutting wages, salaries, pensions, and staff levels in the public sector. The consequence was a stark decrease in household income, purchasing power and living standards.

On the eve of the exit of the third bailout, the government announced plans to provide the details of a series of interventions immediately after August 21, the official expiry of the program. The government envisaged a return to a more decent system of labour relations and minimum wage policy. This includes restoring collective bargaining mechanisms in the labour market, a gradual increase of the minimum wage and an increase in salaries for civil servants who saw their wages slashed over the years.

The announced measures reflect to a certain extent the recommendations that were, at an earlier stage, rejected by the creditors (see our News item of 16 June 2017). The trade unions have initiated protest and strikes to back up the improvement of collective bargaining and the restoration of wages and workers’ rights. They have the impression that the end of the bailout has led to more aggressiveness from companies who refuse to renew wage agreements including increases.

The employers’ organisations reacted negatively to some of the first legal acts that were tabled recently, using the argument that such labour legislation would scale back or revers the earlier reforms and discourage investors.

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