European Trade Union Institute, ETUI.

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Greece

16 juin 2017

Greece: IMF blocks return of sectoral bargaining and social dialogue

In recent months, the IMF has demonstrated that the Fund has no commitment to modern industrial relations characterised by social dialogue, collective bargaining and a decent minimum wage policy. Directed by the Fund the creditors have blocked several proposals to renew the regulatory frame of the Greek labour market as formulated by an international high-level group.

The Greek government agreed at the Euro Summit of 12 July 2015, to undertake rigorous reviews and modernisation of collective bargaining, industrial action and, in line with the relevant EU directive and best practice, collective dismissals, along the timetable and the approach agreed with the creditors. Subsequently, the government signed a Memorandum of Understanding (in August 2015) that included the launch of a consultation process led by a group of independent experts to review a number of existing labour market frameworks, including collective dismissal, industrial action and collective bargaining. The installed Expert Group for the review of the Greek labour market institutions consisted of eight members and published a report in the autumn of 2016. The group reached an agreement in parts of its analysis and most of its recommendations. Two liberal members disagreed with two of the twelve recommendations and had reservations towards a few other statements. The majority of the group was in favour of reinstalling a system of industrywide generally binding collective agreements and of a statutory minimum wage settled through social dialogue.

In Greece, the extension of collective agreements was suspended as a consequence of the Troika intervention. In a critical assessment for the ILO (in the reportEvaluating the effects of the structural labour market reforms on collective bargaining in Greece), it is noted that the institutions representing Greece's official creditors (EC, IMF and ECB and the ESM) have pressed for more flexible, decentralised bargaining. And, although a 2015 IMF working paper found evidence that an erosion of labour market institutions can be associated with an increase of income inequality, the Fund’s official position in the Greek negotiations didn’t change.

In recent interviews, one of the prominent members of the expert group explained how difficult it was to cope with this policy. According to Wolfgang Däubler, eminent professor and European law expert, even a member of the EU Commission had indicated the Commission’s approval after the social partners came to a common declaration on re-establishing collective agreements and a reasonable minimum wage, which fixed by collective agreement. The IMF decided after the recommendations came out to stick to fiscal consolidation and the need to preserve and not reverse existing labour market reforms. In fact, the IMF still sees the highly questionable Troika measures, which lead to a weakening of unions and to an increase of top income shares, as ‘best practices’. According to the Fund, the strong package of reforms that reduces the bargaining power of wage earners makes the dictated policy sustainable.

 

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