1997 Annual Review for Greece

This record reviews 1997's main developments in industrial relations in Greece.


During 1997, the annual GDP growth rate reached 3.4%. Economic growth was accompanied by a fall in inflation: the annual increase in the GDP deflator (which measures changes in prices of all goods and services included in national GDP) fell from 14.4% in 1993 to 6.5% in 1997; while the consumer prices index rose by 5.2% in 1997. Particularly spectacular was the reduction of the public deficit from 13.8% of GDP in 1993 to 5% in 1997. However, increased production, reduced inflation and improved public finances were accompanied by a constant rise in unemployment, from 9.6% in 1994 to 10.4% in 1997, while long-term unemployment now accounts for 50% of all unemployed persons. The improvement in public finances was also accompanied by a significant rise in tensions in the field of industrial relations.

The present Government is formed exclusively by the Pan-Hellenic Socialist Movement (Panellino Socialistiko Kinima, PASOK). The Prime Minister, Kostas Simitis, represents the so-called modernising wing of the party, which has consistently sought to achieve Greek membership of EMU by 2002 at the latest.

Key trends in collective bargaining and industrial action

Traditionally, collective bargaining in Greece has been centralised, and based on annual negotiations. However, a trend started in the 1990s towards the conclusion of National General Collective Agreements (which cover most of the economy) for two-year periods, and 1997 was the second year of operation of a two-year deal concluded in 1996. Changes to the institutional framework (introduced by law in 1990) have in recent years broadened the agenda of negotiations to include issues in addition to purely economic ones (GR9702101F) and allowed more agreement s to be reached at sector and company level.

The year began with the implementation of the second part of the 1996-7 National General Collective Agreement, and an unprecedented wave of strikes, in both the public and private sectors, in opposition to the Government's economic austerity policy (GR9702103N). Similarly, the year ended and 1998 began in a tense social climate, with procedures for negotiating the new national agreement about to start and a growing wave of fresh strike action against new legislation aimed at changing aspects of labour relations in public corporations and utilities without prior collective bargaining (GR9801150N). The year saw a marked shift in the sources of conflict from purely economic issues (wages, taxation and pensions) to more "institutional" issues such as the length and management of working time, measures to fight unemployment or working conditions. This is reflected in the broader framework of demands set out by the Greek General Confederation of Labour (GSEE) for the new National General Collective Agreement (GR9801151N), which includes such issues. This shift, however, has not eliminated conflict over economic matters (GR9711139N and GR9710129F).

Industrial relations, employment creation and new forms of work organisation

The spectacular rise in unemployment in recent years has sparked intense dialogue between the social partners concerning the need to find immediate and effective solutions (GR9702101F). Examples of good practice in this area - such as the Fund for Employment and Vocational Training (LAEK) and joint proposals submitted to the Luxembourg Employment Summit (GR9711142N) - have been the product of negotiations between the social partners at the national level. The proposals to the Luxembourg summit focused, by joint decision, on two groups requiring special attention - young and long-term unemployed people. However, on a practical level, there have been very few coordinated actions or measures aimed at boosting employment at sector or company level. While a national "Confidence Pact" was agreed between the social partners (GR9711138F), local initiatives have proved more difficult to reach (GR9703109N).

The Confidence Pact signed by the Government and the social partners in November 1997, while containing some points of common acceptance and agreement, clearly stresses the differences which arose and were recorded during the social dialogue process which led up to it (GR9704112N). As regards employment policies, while the need to reinforce active measures is noted, the Pact is limited to general guidelines whose implementation will require more specific measures, which in many cases will constitute points of friction between the sides. "Territorial Employment Pacts" are a characteristic example: although the Confidence Pact presents them as a measure to combat unemployment, in practice they are a source of disagreement as regards the means and conditions of their implementation (GR9703109N).

In Greece it is now commonly acknowledged that to tackle unemployment, a long period of economic growth is needed, in parallel with adaptation to new forms of work (and the attendant reforms of the institutional framework of labour relations). However, views regarding the means by which structural changes in the labour market will be carried out are extremely divergent. There has been a lengthy disagreement on fundamental questions, such as duration and organisation of working time, part-time employment and in general everything connected with new forms of work organisation.

On working time, apart from special cases such as the banking sector (GR9711137F), it is quite clear that the social partners are having difficulty agreeing how to reduce working time without a reduction in pay (GR9712145F). This is also the case with regard to new forms of work and working time organisation both at the national level (GR9708122F, GR9708123N, GR9708124N and GR9707120F), branch level (GR9712144F), and company level (GR9706116F). To a large extent, government policy is in line with the viewpoints of the employers' side, although it is differentiated on many points; overall, however, this policy is imbued with a strong tendency to impose greater labour market flexibility.

Developments in representation and the role of the social partners

With regard to workers' representation at national and international levels, and more specifically in connection with the creation and operation of European Works Councils, it is worth noting that despite a delay (the deadline for transposition was in September 1996), on 20 March 1997 Greece officially adopted the EU Directive (94/45/EC) on the issue (GR9704111N). Nevertheless, as in other cases (GR9801149F, GR9712144F, GR9711143N and GR9709127N) where a delay and/or unwillingness to enforce a law has been noted, there is doubt as to the extent to which EWCs will function in practice, and serious questions are posed as to the role they will ultimately play.

Industrial relations and the impact of EMU

As far as EMU is concerned, in the Government's opinion the changes in labour relations and the policy it has been pursuing to date are preparing the Greek economy for full membership. However, in the qualification year, 1997, the country failed to meet the necessary economic criteria for entering EMU in the first wave. No studies have been carried out on the effects of EMU on industrial relations. However, there have been some isolated initiatives, such as that of the banking sector on the effects of EMU on employment in the sector (GR9711141N). In addition the Institute of Labour (INE) of the GSEE has begun a study on the effects of EMU on the labour market (expected to be completed in June 1998).

Conclusions and outlook

Economic and monetary policy in Greece has been accompanied by rising unemployment and increased tension in the field of industrial relations. Industrial action in 1997, which was mainly concerned with economic issues, was followed by the strikes starting in early 1998, which were more concerned with structural changes in the labour market and the transformation of the institutional framework of industrial relations. Although employers' and trade union organisations agree on some of the general guidelines for dealing with unemployment, they differ radically on certain crucial issues, such as reduction and reorganisation of working time.

1998 is expected to bring a heightening of social tensions and sharpening of the differences between the social partners on labour relations issues. In response to the policies of employers and government, the unions will probably develop a more aggressive policy than they had in the past. On the government side, it seems that a specific policy has already been entered upon, aimed at greater flexibility both in the public and the private sector. Sometime before spring 1998 a draft law was due to be submitted on the "readjustment" of labour relations and "adaptation to the new work model". What is more, the Government has stated its willingness to go ahead unilaterally to regulate the organisation of working time, invoking the need to harmonise national legislation with the EU Directive on the issue (93/104/EC), and it appears to be determined to impose drastic changes in the industrial relations regime in certain public corporations, in the face of opposition from some of Greece's strongest trade unions.

(Eva Soumeli, INE-GSEE)

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