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Greece

14 June 2018

Greece: the erosion of industrial relations and the ongoing privatisation program

The bailout program that was signed between the Greek government and its European creditors has led to a decline in workers’ rights in Greece. The third bailout agreement of 2015 mandates the privatisation of a long lists of public assets. However, this privatisation is not without criticism as workers and their trade unions fear a further deterioration of labour standards.

After 2010, the country has been under successive Economic Adjustment Programmes, a funding package from the Troika, consisting of the European Commission, the European Central Bank (ECB) and the IMF. Since the spring of 2018, a possible exit of this bailout program has been discussed. As part of the conditions for receiving funding, the country signed a Memoranda of Understanding with the creditors, under the terms of undertaking specific legislative, economic and political reforms. The reform package was applied from 2010 to 2014 and aimed at reducing labour costs, not only by wage cuts, but also by imposing general restrictions on labour rights and other severe measures that led to a dismantling of core elements of the employment protection system. This policy helped to eliminate the country’s fiscal and current account imbalances, but at the same time led to a severe deterioration in crucial economic and social parameters, with significant cost regarding employment, poverty, inequality, efficient governance and, foremost, many years of recession and stagnation.

The result has been severe deregulation of the labour market that led to the abolition of the extension and favourability principles, as well as limitations to the time extension and after-effects of collective agreements. As a result, bargaining coverage declined from approximately 85% to less than 30% of the workforce, whilst inequality and low-pay incidence increased significantly.

An important part of the bailout program is the privatisation of a long list of public firms and assets, with the argument that privatisation will help to make the economy more efficient and will contribute to reducing public debt. Notably the Greek ports and yacht harbours figure very prominently on that list. The first results of this policy have been reached, such as the sale and transfer of the 100% stake of the railway operation company TRAINOSE SA to Ferrovie Dello Stato Italiane S.p.A. on 14 September 2017 and significant steps in the transaction on the Thessaloniki port. Other prominent targets are the Hellenic Gas Transmission System Operator, the Egnatia motorway, Athens International Airport, Hellenic Petroleum SA, the natural gas supplier Depa and the redevelopment of the site of the former airport Hellinikon. The government projects that it will manage to get 2.73 billion euro in 2018 from the sale of state assets. In the latest report on Economic growth, published by the European Commission in the spring of 2018, the ongoing privatisation programme is said to contribute to investment and growth.

Trade unions and workers have been very critical about the privatisation process. Port workers organised several strikes and work stoppages to protest against the privatisation. The workers have been demanding that their labour status is protected under the privatisation deals. After the sale of power stations owned by the dominant power utility Public Power Corp was approved, workers demonstrated by emptying sacks of coal outside parliament. A list of their demands to the PPC management included the halting of the sale of two lignite plants, the return of 17% PPC stake from the Greek Privatisation Fund HRASF to the state and the signing of a collective labour agreement.

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