In light of the impact of the global downturn on the Greek economy, the social partners have each presented to the government their own proposals to deal with the crisis. By December 2008, unemployment had risen to 8.9%, up from 7.8% in the previous month. Moreover, economic forecasts for 2009 by European Union institutions and the Greek government expect a significant slowdown in the national economy’s growth rate, or possibly stagnation.
The consequences of the financial crisis are now affecting the real economy in Greece, with the unemployment rate in December 2008 increasing to 8.9% from 7.8% in November. Meanwhile, economic forecasts for 2009 envisage a considerable slowdown or even stagnation in the national economy. Therefore, the social partners have submitted their own proposals to the government to tackle the crisis. The proposals include short-term and long-term policy measures.
In light of the impact of the global downturn on the Greek economy, the social partners have each presented to the government their own proposals to deal with the crisis. By December 2008, unemployment had risen to 8.9%, up from 7.8% in the previous month. Moreover, economic forecasts for 2009 by European Union institutions and the Greek government expect a significant slowdown in the national economy’s growth rate, or possibly stagnation.
Proposals of employers
The President of the Hellenic Federation of Enterprises (Σύγχρονες Επιχειρήσεις, Σύγχρονη Ελλάδα, SEV), Dimitris Daskalopoulos, sent a letter to the Minister of Economy and Finance, Yannis Papathanasiou, setting out a package of crisis measures concentrated in four areas. The measures encompass: social and financial support for vulnerable groups in employment protection, incentives to boost the economy and the promotion of structural changes. At the same time, Mr Daskalopoulos emphasised the need for the participation of the social partners in policy planning and implementation in order to combat the current economic crisis.
Social and employment protection
Among the measures recommended by SEV to support financially vulnerable groups is a raised threshold in the level of income that a household may have to benefit from social aid programmes. This provision aims to increase the number of poor households that can avail of social aid programmes.
Regarding the protection of employment, SEV – which is the largest employer organisation in Greece – recommends subsidising companies that undertake to train employees who lose their jobs following merger and acquisition schemes. SEV also proposes to promote active policies of lifelong learning, especially in declining economic sectors. In relation to the increased number of young people in the labour market, the employer organisation suggests that the state should undertake to fund part of the social contributions for young employees who lack job experience, for a specific period of time.
Financial incentives and structural changes
In terms of economic growth, SEV recommends combating tax evasion and reducing the tax burden for any investments by companies in 2009 and 2010.
Structural changes that should be made to the Greek economy to accelerate the economic growth rate include opening the market to competition, minimising bureaucracy, reforming the insurance system and liberalising the energy market while offering incentives for investments in renewable energy sources.
In addition, Mr Daskalopoulos highlighted that no flexible working arrangements or changes in labour law would be necessary.
Trade union proposals
Meanwhile, the Chair of the Greek General Confederation of Workers (Γενική Συνομοσπονδία Εργατών Ελλάδας, GSEE), Yiannis Panagopoulos, sent the trade union’s proposals for tackling the economic crisis in a letter to the Minister of Employment and Social Welfare, Fani Palli-Petralia. GSEE is the largest trade union confederation in Greece. Its measures aim to strengthen and protect permanent employment rather than flexible forms of work, and to provide aid to unemployed persons as well as to low-wage earners and low-income pensioners. The trade unions propose:
the removal of the compulsory dismissal exercise for the duration of the economic crisis for companies receiving public aid. They are also calling for protection measures for economic activities directly affected by the downturn, such as tourism, shipping and construction.
an increase in unemployment benefits and extension of their duration to two years rather than one year.
an additional subsidy for low-wage earners and low-income pensioners should be paid from the national budget for 2009 and 2010 to income groups whose annual earnings do not exceed €10,500 in order to boost consumption and increase the economic growth rate.
Meeting of social partners
Furthermore, in light of the likely deterioration in working conditions on a long-term basis, GSEE invited the respective employer organisations to a meeting to jointly identify policies to protect Greece from the consequences of the economic crisis. GSEE believes that some employers are using the crisis as a pretext and will try to diminish terms of employment as the main measure for tackling the crisis. The employer organisations accepted the invitation, with Mr Daskalopoulos indicating that the social partners should act together to prevent any increase in unemployment. In early March 2009, a round of contacts started in this regard.
Commentary
The common ground of the social partners’ respective proposals for dealing with the economic crisis seems to be providing support to financially vulnerable groups, even if this entails a temporary increase in the public deficit. Such an increase is strongly opposed by the competent EU bodies.
Nevertheless, in the context of their dialogue, the social partners seek a mixture of policies that will primarily encourage the attributes of stable growth in the Greek economy. The growth of the national economy over the last few decades has been mainly founded on cutting labour costs and on EU subsidies.
In addition, the benefits of economic growth should be allocated to the entire population, because Greece still ranks as one of the EU Member States with the greatest income differences between the highest and lowest income groups.
Stathis Tikos, Labour Institute of Greek General Confederation of Labour (INE/GSEE)
Eurofound recommends citing this publication in the following way.
Eurofound (2009), Social partner proposals to combat economic crisis, article.
