Government, unions and employers sign Confidence Pact

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On 10 November 1997, after six months of talks, the Greek Government, trade unions and employers' organisations signed an agreement covering development, competitiveness and employment, known as the Confidence pact between Government and the social partners on the way to the year 2000.

The Confidence Pact between Government and the social partners on the way to the year 2000 was signed on 10 November 1997 by the Greek General Confederation of Labour (GSEE), the Confederation of Public Servants (ADEDY), the Federation of Greek Industries (SEV) and the National Confederation of Greek Commerce (ESEE). The General Confederation of Greek Small Businesses and Trades (GSEVEE) refused to sign. The agreement represented the culmination of a six-month process of negotiation within the social dialogue launched by the Government (GR9704112N).

Public policy guidelines

The first part of the Pact, dealing with "policies for development", sets out the general political guidelines of the Greek Government in the areas of public investments, efficiency of public corporations and the public sector, and industrial policy. These guidelines, which had been published at the outset of the social dialogue process, were mutually accepted by the social partners once the Pact was signed. The main points of the first part of the agreement are as follows.

  • Public investments must be aimed at creating the greatest number of jobs possible. To achieve this goal, tripartite committees may be formed in each region, comprising representatives of local authorities, enterprises and employees.
  • The Pact notes that public corporations and organisations suffer from centralism, bureaucracy, favouritism and lack of infrastructure, and deems it necessary to strive for radical reforms and accelerated training for employees.
  • Current industrial policy is considered sound but it should be accompanied by activity aimed at developing vocational skills, linking initial training with the production process, and ensuring a process of continuous training, because Greece "can no longer base its long-term competitiveness on cheap labour".

Employment and competitiveness

The second part of the Pact, whose title covers policies to support competitiveness and to increase employment, refers mainly to employment since conflicting views were expressed on matters of competitiveness. The main points are as follows.

  • It is accepted by all sides that to deal with unemployment a long period of economic growth is needed, but that this alone is not enough. It is therefore also necessary to adapt to new forms of labour, that is, to ensure structural changes in the labour market.
  • The need to support active employment policies is noted. This general formulation is broken down into three individual measures: first, promotion of the entrepreneurial spirit ("entrepreneurship") aimed at the establishment of small and medium-sized enterprises, since they create many jobs; second, upgrading the system of vocational training in order to remedy the lack of vocational qualifications; and, third, deal with the increase in unemployment associated with the mismatch between new jobs and the knowledge and skills of the unemployed.
  • Finally, the Pact mentions briefly the need to support equal opportunities policies, it does not propose any specific measures.

Pay and other issues

One of the questions that gave rise to lively discussions during the process of social dialogue (GR9710129F) was the level of pay increases over the next two years, on which the Pact finally included the following agreement: nominal wages should rise along with inflation, and should also reflect part of the increase in productivity (where productivity is taken to mean the average productivity of the Greek economy).

The most important issues covered by the social dialogue were changes in labour relations and social protection.

  • The Pact states that measures should be taken to protect young people under the age of 29 through an "integrated national entry into the labour market" which by 2000 will cover all the country's unemployed youth, and that the reduction of non-wage labour costs should be examined as an incentive for hiring unemployed youth.
  • For long-term unemployed people, there will be medical and pharmaceutical care, the cost of which will be covered by the Manpower Employment Organisation (LAEK). Funds will be made available either for the integration of long-term unemployed people into production or for providing them with the insurance stamps they require to receive a pension.
  • Of interest is the passage where it is recognised that labour inspection in its present form cannot fulfil its mission. The Pact proposes creating a "special corps" of labour inspectors to be run by the Ministry of Labour and monitored by the social partners.
  • It is agreed that full-time employment should be the main form of employment. Part-time employment should be used as a supplementary form of employment leading to full time. However all necessary measures will be advanced for promoting part-time employment on a voluntary basis in the public sector (enterprises, utilities and services), with guaranteed equal labour, insurance and social rights.
  • "Unofficial" forms of work, according to the Pact, may be an answer to new economic needs and activities, although they should be subject to regulations aiming at the social protection of employees. This finding covers areas like working at home, teleworking, work for which "receipts for services rendered" are issued, all other forms of non-dependent work, temporary work, subcontracting and the "lending" of workers.
  • The Pact also contains an agreement on the participation of the social partners in" local employment agreements", as well as a description of their importance in combating unemployment.


Tripartite social dialogue is an unfamiliar practice in Greece. From this standpoint, the need - as perceived by all the parties involved - to seek to reach well-argued consensus on basic issues of concern to Greek society is undoubtedly a plus.

However, the arguments and analyses submitted did not yield the results expected because of strong opposition registered in some quarters. As a result of both this opposition and the varying basic approaches adopted by the parties, particularly in relation to development and competitiveness, agreements were reached on separate issues whose implementation will require more specialised measures. As far as labour relations are concerned, points of friction between the sides (for example over working time) were avoided. Finally, it is a fact that the Confidence Pact was not accepted across the whole political and trade union sphere, either with regard to its content or to its anticipated results. For example, the parliamentary opposition criticised the outcome of the dialogue, whilst amongst the employers' organisations, the GSEVEE did not sign the Pact and the GSEE union confederation took the decision to do so by a marginal vote. (Eva Soumeli and Giannis Kouzis, INE/GSEE)

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