GSEE sets out positions and proposals on the economy

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In September 1998, as the Greek government announced its economic and social objectives for the coming year, the GSEE trade union confederation presented its own positions and proposals on the economy.

The 63rd HELEXPO international trade fair opened in Thessaloniki on 5 September 1998. As is customary, the Prime Minister used the opening as an opportunity to announce government economic and social targets for the coming year. Taking its cue from the government, on 7 September the Greek General Confederation of Labour (GSEE) enunciated its own proposals on these issues and claimed that there was an urgent need for them to form part of government policy on the vital issues of Gross Domestic Product (GDP) growth, employment and unemployment.

GDP growth

With regard to GDP growth, the GSEE is demanding:

• modernisation and expansion of Greece's production base. Conditions for achieving these objectives are, first, mapping out sectoral policies to deal with the effects of deindustrialisation, and, second, active support for the rural economy and the services sector, especially the tourist industry;

• support for Greek industrial production;

• speed-up of major public works, whose implementation has already become one of the principal driving forces of GDP growth in recent years;

• restructuring of industrial enterprises, not by passive measures such as job cuts, transformation of the institutional framework of labour relations to the detriment of labour or attempts to boost competitiveness by reducing real wages, but by aggressive measures such as upgrading product quality, modernisation of technology, development of staff skills, improvement of infrastructure, new products, research and the search for new markets;

• upgrading the workforce through continuing training and job security;

• dealing with the "underground" economy which, although it conceals a small part of unemployment, causes tremendous damage to the resources of the social insurance system and competes with the legal side of the economy, thereby undermining it;

• effective, transparent utilisation of European Community resources to promote the accumulation of "human capital", enhance the knowledge and skills of the workforce, and promote spending which takes regional development more into account;

• increased competitiveness through better quality, rapid adaptation of supply to changing consumer needs, improvement of technological equipment and an attendant increase in the productivity of labour; and

• systematic efforts to further reduce the interest rate.

Cost of labour and competitiveness

The GSEE points out that labour costs in Greece are low by international standards. After the devaluation of the drachma in 1998 (GR9803161F), it is estimated that unit labour costs in Greece are now lower than those in Spain, Italy and Portugal. In addition, unit labour costs in Greece have fallen substantially in comparison with the 1980s. Nevertheless, the fall has not been accompanied by improved competitiveness, since the import/export ratio and the trade deficit have been constantly deteriorating.

In Greece, it is claimed, there has been a significant rise in profitability in the private sector, which has not been translated into proportionate increases in gross fixed-capital formation. Therefore, the causes of the Greek economy's poorer performance in international trade and the accompanying increase in the trade deficit should be sought in factors other than the cost of labour.

Economic and Monetary Union

The GSEE believes that the course of European integration has reached a watershed with Economic and Monetary Union (EMU). Attainment of nominal economic convergence conditions and the introduction of the single currency are being carried out alongside an increasing "social deficit" and rising number of unemployed people and people living below the poverty line. As the GSEE sees it, the November 1997 Luxembourg"employment summit" meeting of the European Council (EU9711168F) did not meet the needs of the situation, and that is why there must be a "European pact" on employment and social policy, with specific criteria, conditions for implementation, resources and a timetable for implementation.

Commentary

In the GSEE' s view, with the two-year National General Collective Agreement it signed with the corresponding employer organisations in May 1998 (GR9805171N), and with the continuation of bargaining over other collective agreements, the unions have demonstrated that they are dealing with the economic situation and the specific needs of the national economy at this stage in a responsible way. Wage-earners' trade union organisations have supported the policy of stabilising the economy: as a result, workers' share of income has been reduced and a significant proportion of workers are living below the poverty line, are forced to shoulder substantial tax burdens and see their social benefits reduced.

For these reasons, the GSEE believes that economic policy should in future seek to redistribute income to the benefit of labour, and that working time should be reduced without reducing workers' pay.

However, judging from statements to date by government officials, there seems to be no possibility of the GSEE' s proposals being accepted, because the programme for convergence of the Greek economy, through which Greece will join EMU on 1 January 2001, necessitates continuation of the same economic policy whose effects have provoked the above observations from the GSEE. The GSEE called for a "gradual departure" of economic policy "from nominal convergence and orientation towards achieving the conditions and requirements for real convergence". However, the convergence programme of the Greek economy remains a programme of nominal targets (the criteria of inflation, interest rates, public deficits and the public debt) and the government has shown no intention of deviating from either the nature or the substance of the programme in question. (Elias Ioakimoglou, INE/GSEE)