Greece: Latest working life developments – Q4 2016
The second evaluation of Greece’s economic adjustment programme, the fight against undeclared work, legislation on the social and solidarity economy, and emergency allowances for low-income pensioners are the main topics of interest in this article. This country update reports on the latest developments in working life in Greece in the fourth quarter of 2016.
Second evaluation of economic adjustment programme continues
Labour issues have loomed large in negotiations since October 2016 between the Troika – the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF) – and the Greek government. The negotiations are on the completion of the second evaluation of the economic adjustment programme for Greece. According to reports, the Ministry of Labour, Social Security and Social Solidarity disagrees with the IMF request for the collective redundancy threshold to increase by between 5% and 10%. The IMF also rejects the Greek proposals on the restoration of collective bargaining and setting the minimum wage through this, which is currently set by the Minister of Labour.
Negotiations got off to a positive start when the Committee of Experts on Labour Issues (PDF), which generally supports the Greek positions, unanimously stated that:
- no changes are needed to the trade union law on the rules for strikes and lockouts;
- the extension of collective/sectoral and occupational agreements be restored.
The Committee also recommended, by a majority, that the responsibility for setting the minimum wage be returned to the social partners, through collective bargaining.
In addition, at their meeting with the Minister of Labour, representatives of the employer organisations confirmed the proposals they had made in the joint statement of the national social partners on 19 July 2016 that:
- the current legal framework for collective dismissals be brought in line with that of the European Union and international labour standards;
- the extension of sectoral agreements should be restored to ensure workers are treated equally, and to prevent unfair competition between businesses.
Eurofound contributes to roadmap to tackle undeclared work
In October 2016, the Roadmap for fighting undeclared work (PDF), a three-year plan for Greece, was ratified and published. It was formulated by the ILO, in close collaboration with the Greek government and the social partners, and funded by the European Commission through the programme 'Supporting the transition from Informal to formal economy and addressing Undeclared Work in Greece'.
One of the first things the roadmap delivered was the preparation of the unique Diagnostic report of undeclared work in Greece (PDF). This report was prepared by a high-level team of experts – including Eurofound’s Dr Stavroula Demetriades – and constitutes a remarkable analysis of undeclared work and a key contribution to the national policy debate on the issue. It was endorsed by the Greek government and the social partners at a high-level tripartite meeting. In addition, the national social partners signed a joint statement on labour market issues, including the extension of the collective labour agreements. The social partners involved were:
- General Confederation of Greek Workers (GSEE);
- Hellenic Federation of Enterprises (SEV);
- Hellenic Confederation of Professionals, Craftsmen and Merchants (GSEVEE);
- National Confederation of Hellenic Commerce (ESEE);
- Greek Tourism Confederation (SETE).
New law on the social and solidarity economy
Law 4430/2016 (Government Gazette 205/Α/31-10-2016) on the social and solidarity economy, and the development of its institutions and other provisions, introduces a new legal entity, the Workers’ Cooperative; this has to comprise at least three natural persons who form a cooperative to make a living from their work. The law also sets the rules for distributing the profits of social economy institutions, with 35% being shared among employees unless two-thirds of an institution’s General Meeting decides to retain the sum to reinvest in the business or to create new jobs.
Bill on 2017 social solidarity income
A bill to extend social solidarity income to all the country’s municipalities by 1 January 2017 was tabled and debated in parliament. Social solidarity income provides labour market activation and promotion programmes, including helping people to fill vacant jobs and participate in vocational training and skills acquisition programmes, or encouraging their inclusion in, or return to, the education system and 'second chance' schools.
Parliament approves extra support for pensioners
Parliament approved, by a large majority, extraordinary financial support for 1.6 million pensioners whose pensions for December 2016 totalled €850 or less. Pensioners with higher earnings will receive a minimum of €300, while those below the poverty line (44.8% of pensioners according to official data from the Ministry of Labour) will receive more. The emergency allowance is tax-free and given as a social dividend from surplus tax revenues for 2016 – €1 billion more than the agreed target.
Eurozone finance ministers decided in mid-December 2016 to suspend short-term debt relief measures for Greece in response to the Prime Minister’s announcement of a one-off payment to low-income pensioners during Christmas, and the temporary suspension, for 2017, of VAT for selected Aegean islands that have been hit hard by the refugee emergency. These actions have been seen as contravening the concluded agreements. Disagreements, not only between the IMF and Greek government but also between IMF and European institutions, added to delays in the crucial negotiations on the second bailout programme review and increased the chances of putting Greece’s economic recovery at risk.