Devaluation of the drachma on the agenda at 29th GSEE congress
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The 29th congress of Greece's GSEE trade union confederation concluded in March 1998 with the election of a new 45-member administrative board. As well as issues such as development, employment, incomes and social protection, the congress discussed the devaluation of the drachma - a move which has also brought reactions from other social partner organisations.
On 15 March 1998, the 29th congress of the Greek General Confederation of Labour (GSEE) concluded by electing the confederation's new 45-member administrative board, which will remain in office for the next three years. The key features of the new GSEE administration are the following.
- With 22 seats, PASKE, the trade union faction of the Pan-Hellenic Socialist Movement (PASOK) no longer has an absolute majority.
- DAKE, the trade union faction of the conservative New Democracy (ND) party has moved up to second place (99 delegate votes, 10 seats).
- ESAK, the trade union faction of the Communist Party (KKE) fell back to third place (92 votes, 10 seats).
- Autonomous Intervention, the trade union faction of the Coalition of the Left and Progress, gained fourth place (three seats).
- The opposition factions to PASKE are now in the majority.
These five key features, combined with the mounting economic and social problems the GSEE will be called on to deal with in the coming months, may change the situation in the new administrative board.
Apart from the political outcomes of the congress, it is also worth noting that the number of workers represented by the GSEE has fallen off: this can be seen in the organisational makeup and identity of the congress. Furthermore, the number of women on the administrative board has been reduced from three to two.
Reactions to the devaluation of the drachma
The GSEE congress closed in a new climate, created by the devaluation of the drachma announced on 14 March and the supplementary measures announced for the next 18 months by the Minister of National Economy on 15 March. The congress thus, as well as debating issues such as development, employment, incomes and social protection, focused on the devaluation issue.
The chair of the GSEE said that the devaluation has restored the drachma's foreign-exchange position, and recalled the position put forward by the GSEE, in the framework of the recent social dialogue, in favour of a "more realistic exchange policy". He stressed, however, that steps must be taken to prevent price increases, stating that the workers have been made to pay in the past and that the GSEE will not accept new cutbacks in workers' and pensioners' purchasing power. Overall, according to a text drawn up at the congress, the GSEE's positions on the devaluation can be summarised as follows:
- the decision to devalue the drachma by 14%, in the framework of its integration in the EU Exchange Rate Mechanism, changes the outlook for the Greek economy as well as the content of the country's economic and social policy;
- the GSEE disagrees with the view that, in order to to be successful, a devaluation has to be supported by stringent measures of economic and social policy, because this would put workers and pensioners in a worse position and would not create the conditions necessary for productive support of the drachma;
- the previous point means that at present and in the future the national currency must be strong as far as production, technology and labour are concerned;
- as the GSEE has maintained and proposed again and again, Greece's economy is in need of structural changes, centred around increased investment, employment, purchasing power and real incomes;
- in present conditions, the GSEE maintains that a speed-up in privatisations of public enterprises, liberalisation of the labour market, cutbacks in the incomes of workers and pensioners, strengthened financial discipline and deregulation of labour relations and social insurance cannot be the components of post-devaluation economic and social policy; and
- the GSEE calls on the Government to move away from unilateral actions detrimental to labour, and in the context of a calm, exhaustive and meaningful dialogue to shape a new mix of economic and social policy that will protect and support the national currency through the development of the economy, and not through the "underdevelopment" of labour.
In parallel, a statement by the Athens Labour Centre (EKA) calls the devaluation and the simultaneous announcement of the supplementary measures a head-on attack on the incomes of wage earners and pensioners, already severely put to the test, and on the conditions of employment and social insurance. The EKA rejects the appeal by the Minister of National Economy for a 2.5% wage increase in 1998, when it is uncertain what the rate of inflation will be for the year, and warns that in any event it will use every appropriate method and means to defends workers' incomes and basic rights.
From the employers' side, the statement of the chair of the Federation of Greek Industries (SEV) is characteristic. He stressed that "exchange policy has reached its limits. If the Government's commitments for the next 18 months are realised, it will be a step in the right direction." What is more, the Athens stock exchange responded to the devaluation with a rise of 12% in share values in two days.
The devaluation of the drachma comes after a decade of depreciation of the currency and appears to be ushering in a new period of restructuring of the economy and the labour market. The Government and the employers' side believe that interventions to create greater flexibility in labour relations and social insurance will be steps in the right direction to support the drachma. On the other hand, the trade unions have made it clear that the devaluation should be accompanied by a mix of economic and social policy which uses growth of the economy, and not further setbacks for labour, to shield the national currency. However, according to all indications, a clash between employers, government and the unions is in the offing. Also expected to be of decisive importance is the readjustment of the framework of claims for the new National General Collective Agreement (GR9801151N) due to be submitted by the GSEE in late March. In any case, the new agreement is not believed likely to have a two-year duration. (Eva Soumeli, INE-GSEE)
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